Freelance Rate Calculator
Hourly rate from salary target, billable hours, costs, and margin.
What it does
Salaried pay hides overhead that freelancers bill directly: unbillable admin, empty weeks, software, insurance, and risk. The honest rate adds salary goal plus business costs plus a margin, then divides by true billable hours.
The tool above takes the income target, weekly billable hours, billing weeks, costs, and margin. It returns the hourly rate with yearly and monthly revenue needs.
Billable honesty decides everything. Twenty client hours a week is already strong; forty hour freelancers usually bill half of it after sales, support, and learning.
Taxes sit outside this math and bite harder solo. Self employment tax plus income tax often claims a third, so the rate funds gross that still gets taxed.
How to use
- Enter the salary you want to keep.
- Enter real billable hours, not desk hours.
- Subtract holidays and dry spells from weeks.
- Add costs and margin, then charge the rate.
Formula
- target + costs
- Pay goal plus business overhead for the year.
- margin
- Risk and growth buffer as a rate.
- billable
- Client hours actually invoiced yearly.
Taxes apply after this rate. Raise the target to net the wanted take home, or compute the rate on pre tax goals and save the tax share first.
Worked example
Example: $100k target, 20 h/week, 48 weeks, $10k costs, 20% margin
Salary goal 100,000, twenty billable hours, four weeks off, costs 10,000, margin 20%.
- Billable: 20 x 48 = 960 hours.
- Base: 100,000 + 10,000 = $110,000.
- Need: 110,000 x 1.20 = $132,000 a year.
- Rate: 132,000 / 960 = $137.50 per hour.
- Monthly: 132,000 / 12 = $11,000.00.
Reference table
| Weekly billable | Yearly hours | Rate |
|---|---|---|
| 10 h | 480 | $275.00 |
| 20 h | 960 | $137.50 |
| 25 h | 1200 | $110.00 |
| 30 h | 1440 | $91.67 |
Limits
- Pre tax math. Self employment tax excluded.
- Assumes steady billing. Feast and famine need bigger margins.
- Market rates cap the formula. Clients pay value, not your costs.
- Value pricing can beat hourly on fixed outcomes.
Common mistakes
- Dividing salary by 2080 and calling it the rate.
- Counting admin hours as billable.
- Forgetting dry weeks in the yearly count.
- Skipping margin and absorbing every shock.
- Underpricing to win work that burns out.
Try it yourself
Quick checks. Answers sit tucked under each question.
$80k target, 15 h/week, 50 weeks, $5k costs, 10% margin?
Need (85,000 x 1.10) = 93,500. Hours 750. Rate $124.67.
Same but 25 h/week?
Hours 1250. Rate 93,500 / 1250 = $74.80.
Questions
Why is freelance rate above salary hourly?
Overhead, empty weeks, and risk ride on fewer billable hours. Double salary hourly is a common starting guess.
How many billable hours are realistic?
Fifteen to twenty five a week for most solos. Admin, sales, and learning eat the rest.
Should beginners charge less?
A little, never starvation rates. Cheap clients cost the most time per dollar.
Hourly or project pricing?
Hourly for open scope, fixed for defined outcomes. Fixed wins once speed is known.
How do taxes fit in?
Set aside a share of every invoice. Quarterly estimates avoid penalty surprises.
When should I raise rates?
When booked out weeks ahead or when costs creep. Yearly reviews beat sudden jumps.