Freelance Hourly Rate Calculator

How the freelance rate is calculated

The calculator works backwards from the money you want to keep. It adds back income tax and business expenses to find the revenue you need, then spreads that revenue over the hours you can really bill.

1. Profit before tax = take-home income ÷ (1 − tax rate)
2. Revenue needed = profit before tax + business expenses
3. Billable hours per year = (52 − weeks off) × billable hours per week
4. Hourly rate = revenue needed ÷ billable hours per year
5. Day rate = hourly rate × hours in a billable day

Expenses are added after the tax step because in most tax systems business expenses are deducted before profit is taxed. If your local rules differ, adjust the tax rate.

Worked example

You want to keep $60,000 a year. Your expenses are $10,000, your effective tax rate is 25 %, you can bill 25 hours a week and you take 6 weeks off.

• Profit before tax: $60,000 ÷ 0.75 = $80,000
• Revenue needed: $80,000 + $10,000 = $90,000
• Billable hours: (52 − 6) × 25 = 1,150 hours
• Hourly rate: $90,000 ÷ 1,150 = $78.26
• Day rate (8 hours): $626.09

Notice how much the billable hours matter. With 35 billable hours a week instead of 25, the same goal needs only $55.90 an hour. Being realistic about non-billable time is the most common thing new freelancers get wrong.

Want the full method with more examples? Read how to calculate your freelance hourly rate.