Freelancer Rate Calculator
Free tool, no sign-up required
Minimum Hourly Rate
$0
Recommended Rate (+20% buffer)
$0
Monthly Revenue Target
$0
Annual Revenue Target
$0
Effective Billable Hours/Year
1362 hrs
Freelancer Rate helps independent contractors and consultants set an hourly rate that actually covers their income goals and business costs, not just a number picked at random. It is used by freelancers switching from salaried work, agencies pricing new hires, and anyone who has never had to account for the hours that do not get billed to a client. Getting this number wrong is one of the most common reasons new freelancers end up earning less than they did in a full-time job.
Formula
Hourly Rate = (Desired Annual Income + Annual Business Expenses) / Billable Hours per Year
Most freelancers can only bill 1,000 to 1,500 hours a year even working full-time, since admin work, marketing, sales calls, and unpaid downtime eat into the rest of a working year. Plugging in a full 2,000-plus hour year, as if every hour worked were billable, will significantly understate your real rate.
Example
Example: you want to earn $60,000 a year after covering $10,000 in annual business expenses like software, insurance, and equipment, and you can realistically bill 1,200 hours a year. Hourly Rate = (60,000 + 10,000) / 1,200 = $58.33 per hour, before adding any profit buffer on top.
FAQ
Why is my billable rate higher than my old salary divided by hours?
A salary divided by hours worked ignores everything an employer was quietly covering for you: payroll taxes, health insurance, paid vacation, equipment, and software licenses. As a freelancer you now have to price all of that into your rate yourself, on top of the fact that only a fraction of your working hours are actually billable, unlike a salaried job where most of your time is paid regardless.
Should I include taxes in my target income?
Yes, if the income figure you are targeting is meant to be your take-home pay after taxes. Self-employed workers typically owe more in tax than a salaried employee at the same income, since there is no employer covering half of certain payroll taxes, so build that into either your target income or your annual business expenses before running the calculation, rather than discovering the shortfall at tax time.
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