The Business Calc

Freelance Hourly Rate Calculator

Hourly rate = (take-home income ÷ (1 − tax rate) + expenses) ÷ billable hours per year. Enter what you want to earn and how much you can really bill to get the rate that pays it.

Updated · An estimate using one flat tax rate — not tax advice.

Try an example
Software, equipment, insurance, health cover, accounting.
Hours you can charge for — not hours you work.
52 minus holidays, vacation, and sick time.
    Charge at least $95.65

    per billable hour to take home $75,000.00 a year.

    $110,000.00 Revenue needed 1,150 Billable hours / year $95.65 Hourly rate
    Day rate (8 hours) $765.22
    Estimated tax $25,000.00

    At other billable hours

    • 20 hours / week $119.57
    • 30 hours / week $79.71
    • 35 hours / week $68.32

    What this rate means

    • Dividing your income by a 2,080-hour work year gives $36.06 an hour — charge that and you'd fall well short once tax, expenses, and unbilled time are counted.
    • You need $110,000.00 in billings a year, or about $9,166.67 a month.
    • Billable hours move the rate more than anything else. Be honest about them — time spent finding work, invoicing, and waiting between projects isn't billable.

    Hourly rate formula

    Formula and worked example
    revenue needed = take-home income ÷ (1 − tax rate ÷ 100) + expenses hourly rate = revenue needed ÷ (billable hours per week × working weeks)

    Tax is charged on profit — revenue minus expenses — so the income target is grossed up for tax first, then expenses are added on top. The day rate is the hourly rate × 8.

    Worked example

    Take-home income
    $75,000
    Grossed up for 25% tax
    $75,000 ÷ 0.75 = $100,000
    Plus expenses
    $100,000 + $10,000 = $110,000
    Billable hours
    25 × 46 = 1,150
    Hourly rate
    $110,000 ÷ 1,150 = $95.65

    Freelance rate FAQ

    How do I calculate my freelance hourly rate?

    Work out the revenue you need — your take-home income grossed up for tax, plus business expenses — and divide it by the hours you can actually bill in a year. With $75,000 take-home, a 25% tax rate and $10,000 of expenses, you need $110,000 of revenue; across 1,150 billable hours that's about $95.65 an hour.

    Why not just divide my old salary by 2,080 hours?

    Because 2,080 assumes 40 billable hours every week of the year. Freelancers spend a large share of their time on sales, admin, and unpaid gaps between projects, take holidays without pay, and cover their own taxes and expenses. That's why freelance rates are typically well above the salary-equivalent hourly figure.

    How many billable hours per week is realistic?

    It varies, but many full-time freelancers bill somewhere between 20 and 30 hours a week once marketing, admin, and client communication are accounted for. If you're unsure, start lower — overestimating billable hours is the most common way to underprice.

    What tax rate should I use?

    Use your best estimate of the combined rate on your business profit, including income tax and any self-employment or social-security contributions where you live. This calculator applies one flat rate as an estimate; it isn't tax advice, and an accountant can give you a precise figure.

    What goes into business expenses?

    Everything you pay to run the business that an employer would otherwise cover: software, equipment, insurance, health cover, accounting fees, coworking or home-office costs, training, and retirement contributions you want to fund.

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