Freelance Hourly Rate Calculator
Calculate exactly what you need to charge to meet your income goals.
Minimum Hourly Rate:
$0.00
Total Annual Revenue Needed:
$0.00
Weekly Revenue Target:
$0.00
Total Billable Hours/Year:
0
How to Calculate Your Freelance Hourly Rate
One of the biggest challenges for freelancers, consultants, and contractors is determining a fair and profitable hourly rate. Unlike a traditional salary, your freelance rate must cover not just your take-home pay, but also your taxes, overhead costs, and unbilled time. Use the calculator above to reverse-engineer your rate based on your financial goals.
The Formula Behind the Calculation
To accurately calculate your hourly rate, you cannot simply divide your desired salary by 2,080 (the standard number of work hours in a year). You must account for the "Freelance Gap" consisting of taxes and non-billable administrative work.
The mathematical logic used in this calculator is:
Hourly Rate = (Target Net Income + Expenses) / (1 – Tax Rate) / Total Billable Hours
Key Factors Affecting Your Rate
- Billable vs. Non-Billable Hours: You might work 40 hours a week, but you likely only bill for 25-30. The rest is spent on marketing, accounting, and emails. If you divide your income goal by 40 hours, you will undercharge.
- Taxes: As a freelancer, you are responsible for both the employee and employer portion of FICA taxes (in the US), plus income tax. A safe estimate is often 25-30%.
- Time Off: You don't get paid vacation. If you want 2 weeks of vacation and 1 week of sick days, you are only earning revenue for 49 weeks a year.
What are Business Expenses?
Don't forget to factor in the costs of running your business. Common overhead costs to include in the "Annual Business Expenses" field include:
- Software subscriptions (Adobe, Zoom, Slack)
- Hardware upgrades (Laptops, Cameras)
- Health insurance premiums
- Marketing and website hosting
- Co-working space or home office costs
Should You Charge Hourly or Flat Rate?
While this calculator helps you determine your internal hourly baseline, you don't always have to share this number with clients. Knowing your minimum hourly requirement allows you to price fixed-fee projects confidently. Simply estimate the hours a project will take and multiply by your calculated rate to generate a flat fee quote that ensures profitability.