Freelance Hourly Rate Calculator

Work out what to charge per hour to hit your target take-home, after taxes, business overhead, and unpaid time.

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hours
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Sanity Checks

Realistic billable %
50–70%
Solo freelancers, all-in
SE tax (US)
~15.3%
On top of income tax
Vacation buffer
4–6 weeks
Off + sick + holidays
Overhead floor
$3k–$10k+
Software, insurance, gear

Your Required Rate

Calculated
Hourly rate to charge
$0
Per billable hour
Annual gross revenue
$0
Before tax & overhead
Billable hours / year
0
Capacity to sell
Day rate (8h)
$0
Equivalent project quote

How the Calculator Works

Most new freelancers price by dividing their old salary by 2,080 hours. That underprices the work dramatically — it ignores taxes, business expenses, and the fact that no freelancer bills every hour they work.

Required hourly = (Target take-home + Overhead) ÷ ((1 − tax rate) × billable hours/year)

Where the numbers come from

  • Billable hours/year = weeks worked × hours per week × billable %
  • Billable % covers the gap between hours worked and hours invoiced. Sales calls, admin, marketing, and learning all eat into this. Solo freelancers rarely exceed 70%.
  • Effective tax rate for US self-employed should include both income tax and ~15.3% self-employment tax (Social Security + Medicare).
  • Overhead spreads fixed annual costs across your billable hours: software, insurance, equipment, accounting, training, marketing.

Why this matters

  • Sustainability: An underpriced rate forces overwork to hit income targets, leading to burnout.
  • Negotiating floor: Knowing your true number lets you walk away from work that does not clear it.
  • Quote consistency: Converting to a day rate or project quote becomes mechanical instead of guesswork.

Common mistakes

  • Assuming 100% billable. The single biggest pricing error new freelancers make.
  • Forgetting self-employment tax. Withholdings are now your problem, not your employer's.
  • Ignoring overhead. The cost of being in business is real even if it feels invisible.
  • Pricing for now, not for slow months. Build in a reserve so a quiet quarter does not derail the year.

Adjusting for your market

This calculator gives you the floor — the rate below which the math stops working. Your market rate may be much higher: scarcity of your skill, client size, and perceived value all matter. Use the calculated number as the absolute minimum, then raise from there based on what the market will bear.

Frequently Asked Questions

Is the calculated rate what I should actually quote clients?
No — it's your floor. Below this, the math stops working. Most freelancers should quote 20-50% above the floor to allow for negotiation, account for skill scarcity, and build margin into every project. Use this number to walk away from work that doesn't clear it, not to set the rate you lead with.
What billable percentage is realistic?
Solo freelancers without dedicated sales or admin staff typically bill 50-70% of their working hours. Agencies push higher because they have specialists handling non-billable work. If you assume 100% billable, you'll underprice by roughly 30-50% versus reality.
How do I handle taxes in different countries?
This calculator uses a single "effective tax rate" — enter the combined burden including income tax, social insurance, and any self-employment-specific taxes (in the US, ~15.3% for Social Security + Medicare on top of income tax). For UK self-employed, factor in Class 2/4 NICs. Consult a local accountant for your specific bracket.
Should I include retirement savings in my target?
Yes. As an employee, your employer may have funded retirement on top of your salary. As a freelancer, that's now your line item. Bake 10-15% of target take-home back into the "target" figure to cover retirement self-funding.
What if I'm raising rates with existing clients?
Use this calculator to set the new floor, then communicate the change with notice (typically 30-90 days). Clients who refuse the new rate can be replaced or transitioned out — calculate whether replacing them at the new rate is feasible within your market.

Common pitfalls

  • Forgetting overhead grows with revenue: as you earn more, software/insurance/accounting costs scale too. Re-run the calculation yearly.
  • Ignoring scope creep: if you quote 10 hours and deliver 16, your effective rate drops by 38%. Scope discipline matters more than rate.
  • Pricing for now, not slow months: a 6-month feast/famine cycle means your "average" billable hours are lower than your best month suggests.
  • Anchoring on your old salary: employees are subsidized by benefits, paid time off, and employer payroll contributions worth 25-40% on top of salary. Don't price your hour at salary/2,080.