Freelance Rate Calculator
The hourly and day rate you need to cover your target income, business costs, fees and an optional tax reserve.
Your freelance work
Filled in with example values. Replace them with your own.
Your target
Your time
Business costs
Optional
A percentage of your profit to put aside for taxes. Choose it yourself or ask an accountant; this calculator does not know your tax rate.
Currency symbol
Results update as you type.
Result
Freelance rate: $61.79 per hour ($494.32 per 8-hour day)
Charge at least
$61.79per hour
- Day rate8 billable hours
- $494.32
- Revenue per working week
- $1,482.84
- Revenue per monthYearly revenue ÷ 12
- $5,684.21
- Billable hours
- 1,104 a year
- Non-billable timeAdmin, sales, learning
- 16 h a week
Where a year of revenue goes
- Personal income
- $60,000.00
- Business expenses
- $4,800.00
- Platform and payment fees5% of invoiced revenue
- $3,410.53
- Revenue to invoice
- $68,210.53
How it’s calculated
Billable hours a year
40 h × 46 weeks × 60% = 1,104 h
Plus business expenses
$60,000.00 + $4,800.00 = $64,800.00
Before fees are taken
$64,800.00 ÷ (1 − 5%) = $68,210.53
Hourly rate, rounded up
$68,210.53 ÷ 1,104 h = $61.79
How the freelance rate calculator works
The calculator starts from what you want to keep and works backwards to what you need to invoice. It adds your business expenses and, if you choose, a tax reserve. It then allows for the fees a platform or payment provider takes from each invoice, and spreads the total over the hours you can actually bill in a year.
The key idea is that not every working hour is billable. Only the hours clients pay for earn money, so the rate is divided by billable hours, not by all the hours you work.
The formula
Billable hours = Hours per week × Working weeks × Billable %
Profit = Personal income ÷ (1 − Tax reserve %)
Revenue after fees = Profit + Business expenses
Revenue to invoice = Revenue after fees ÷ (1 − Fee %)
Hourly rate = Revenue to invoice ÷ Billable hours
The hourly rate is rounded up to the next cent so that it always covers your targets. The day rate is the hourly rate multiplied by the number of hours in a billable day, 8 unless you change it.
Worked example
A designer wants to keep 60,000 a year. They work 40 hours a week, take6 weeks off, and bill about 60% of their time. Their costs are 300 a month plus 1,200 a year, and their payment provider keeps 5% of each invoice. They decide to set aside25% of profit for taxes; this is their own planning figure, not a rate from the calculator.
- Billable hours: 40 × 46 weeks × 60% = 1,104 hours a year
- Profit before the reserve: 60,000 ÷ 0.75 = 80,000 (20,000 set aside)
- Business expenses: 300 × 12 + 1,200 = 4,800, so 84,800 must be left after fees
- Revenue to invoice: 84,800 ÷ 0.95 = 89,263.16 (4,463.16 in fees)
- Hourly rate: 89,263.16 ÷ 1,104 = 80.854…, rounded up to 80.86 an hour
- Day rate for an 8-hour day: 80.86 × 8 = 646.88
Without the tax reserve, the same targets need 61.79 an hour.
Assumptions and limitations
- Personal income is what you want to keep from the business. Whether personal tax is due on it, and how much, depends on where you live and how you are set up.
- The tax reserve is a percentage of profit (revenue after fees and expenses) that you choose. It is a planning assumption, not a tax calculation or tax advice.
- Fees are treated as a percentage of every invoice. Fixed per-payment charges are not included; add them to your expenses if they matter.
- Every working week is assumed to have the same hours and billable share. Real years are uneven.
- The result is the rate you need, not a market rate, and it does not guarantee clients or income.
Frequently asked questions
What does “billable time” mean?
It is the share of your working hours that a client pays for. Finding clients, writing proposals, invoicing, admin and learning are work too, but nobody is billed for them. If you work 40 hours a week and bill 24 of them, your billable time is 60%.
What billable percentage should I use?
Use your own numbers if you can: track a few typical weeks and divide billed hours by total working hours. It varies a lot with the type of work, how established you are and how much selling you do, so there is no single right figure.
Why not just divide my target income by 40 hours × 52 weeks?
Because you will not bill every hour of every week. Holidays, sick days and non-billable work all reduce the hours that earn money, and expenses, fees and taxes come out of what you invoice. Dividing by all the hours in a year gives a rate that is too low.
How should I choose the tax reserve?
It depends on your country, your income and your situation, so the calculator does not suggest one. Ask an accountant or check your tax authority’s guidance, then enter the percentage of profit you want to put aside. It is a planning figure, not a tax calculation.
Why are fees divided rather than added on?
Platforms and payment providers take their percentage from the amount you invoice. If a platform keeps 10%, you need to invoice 100 ÷ 0.9 = 111.11 to receive 100. Adding 10% would only give 110 and leave you short.
Will clients pay this rate?
The calculator tells you what you need to charge to reach your own targets. It cannot tell you what the market will pay or guarantee that you will find work at this rate. Compare it with rates for similar work and adjust your targets, hours or costs if the two are far apart.