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Freelance Hourly Rate Calculator

Your Minimum Hourly Rate

$0.00

function calculateFreelanceRate() { var salary = parseFloat(document.getElementById('desiredSalary').value); var expenses = parseFloat(document.getElementById('annualExpenses').value); var margin = parseFloat(document.getElementById('profitMargin').value); var weeks = parseFloat(document.getElementById('billableWeeks').value); var hours = parseFloat(document.getElementById('hoursPerWeek').value); if (isNaN(salary) || isNaN(expenses) || isNaN(margin) || isNaN(weeks) || isNaN(hours) || weeks <= 0 || hours <= 0) { alert('Please enter valid positive numbers for all fields.'); return; } // Total Gross Revenue Required to cover salary and expenses var subTotal = salary + expenses; // Add profit margin (Grossing up) var totalRevenueRequired = subTotal / (1 – (margin / 100)); // Total Billable Hours var totalBillableHours = weeks * hours; // Hourly Rate var hourlyRate = totalRevenueRequired / totalBillableHours; var resultDiv = document.getElementById('freelanceResult'); var rateDisplay = document.getElementById('hourlyRateDisplay'); var breakdown = document.getElementById('breakdownDisplay'); resultDiv.style.display = 'block'; rateDisplay.innerHTML = '$' + hourlyRate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + ' / hr'; breakdown.innerHTML = 'To earn a $' + salary.toLocaleString() + ' take-home salary after $' + expenses.toLocaleString() + ' in costs and a ' + margin + '% profit margin, you need to bill a total of $' + totalRevenueRequired.toLocaleString(undefined, {maximumFractionDigits: 0}) + ' annually across ' + totalBillableHours + ' billable hours.'; }

Setting your freelance hourly rate is one of the most critical decisions you will make as an independent professional. Price yourself too low, and you risk burnout and financial instability. Price yourself too high without the necessary value proposition, and you may struggle to land clients. This guide and calculator are designed to help you find the "sweet spot" based on your actual financial needs.

The Formula for Freelance Pricing

Unlike a traditional job, your hourly rate as a freelancer must cover more than just your time. It must account for overhead, taxes, insurance, and the "unbillable" time spent on marketing, invoicing, and lead generation. The basic formula used in our calculator is:

• (Desired Net Salary + Business Expenses) / (Billable Weeks × Billable Hours) = Base Rate

1. Desired Annual Net Salary

This is the amount of money you want to have left over after all business expenses are paid, but before personal income taxes. Consider your cost of living, personal savings goals, and retirement contributions.

2. Business Expenses & Overhead

As a freelancer, you are the business. You must account for:

• Software subscriptions (Adobe Creative Cloud, Zoom, Slack)
• Hardware (Laptops, monitors, office furniture)
• Professional insurance (Indemnity or Liability)
• Marketing costs (Website hosting, LinkedIn Premium)
• Accounting and legal fees

3. The "Billable Hours" Trap

A common mistake for new freelancers is assuming a 40-hour work week. In reality, about 25% to 40% of your time will be spent on non-billable tasks like admin, sales, and learning. Most successful freelancers aim for 20-30 billable hours per week. Additionally, remember to subtract weeks for vacation, sick leave, and public holidays (usually 4 to 6 weeks total).

Realistic Example Calculation

Let's say Jane is a freelance Graphic Designer:

• Desired Take-home: $80,000
• Annual Expenses: $8,000
• Profit Margin: 15% (for business growth/savings)
• Vacation/Sick Days: 4 weeks (48 billable weeks total)
• Weekly Billable Hours: 25 hours

Jane's total revenue target would be approximately $103,500. Dividing this by 1,200 billable hours (48 weeks × 25 hours) results in a rate of roughly $86.25 per hour.

Frequently Asked Questions

Should I use an hourly rate or project-based pricing?
While an hourly rate helps you understand your baseline, many experts recommend "Value-Based Pricing" for projects. However, you still need to know your hourly floor to ensure the project remains profitable.

What about self-employment taxes?
In many regions, you should add an additional 15-30% to your rate to cover the taxes that an employer would typically pay. Our calculator treats "Desired Salary" as pre-tax income.

When should I raise my rates?
A good rule of thumb is to raise your rates by 5-10% every year, or whenever your "close rate" for new leads exceeds 80%, indicating that you are likely underpriced for the market.