Freelance Hourly Rate Calculator

Work out the hourly and day rate you need as a freelancer to keep your target income after tax, business costs, holidays, sick days and unbillable hours.

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About this tool

What is the Freelance Rate Calculator?

Start from what you want to keep and work backwards. Enter the take-home income you are aiming for, your yearly business expenses and your effective tax rate, then the days you work and the share of your time that clients actually pay for. The calculator returns the hourly rate and day rate that hit the target, plus the revenue you need per year and per month.

The answer is usually higher than people expect, because a freelancer does not bill 40 hours a week for 52 weeks. Holidays, public holidays and sick days come off the calendar, and of the days that remain, a good share goes on sales, admin, invoicing and learning. Billing 65% of working hours is a realistic figure for many solo consultants.

A small table shows how the rate changes if you bill more or fewer hours, and the floor rate shows the minimum that only covers expenses. Round the result up to a figure you are comfortable quoting.

  • Hourly and day rate from a take-home income target
  • Vacation, holidays, sick days and billable share
  • Effective tax rate and optional extra margin
  • Revenue per year and month, tax set aside, floor rate
  • Rate table for 40% to 90% billable
  • Shareable link and copyable summary
Read the guide: How to Calculate Your Freelance Hourly Rate (and Day Rate)

How to use the Freelance Rate Calculator

  1. Enter the yearly take-home income you want after tax and business costs.
  2. Add your yearly business expenses and your effective tax rate on profit.
  3. Optionally add an extra margin for savings, quiet months or growth.
  4. Set days per week, hours per day, vacation, public holidays and sick days.
  5. Set the billable share of your working hours and read the hourly and day rate.

Worked examples

Basic case

Input

Take-home 60,000; expenses 10,000; tax 25%; 5 days x 8 h; 20 vacation, 10 holidays, 5 sick; 70% billable

Output

$71.43 an hour, $571.43 a day, $90,000 revenue

225 working days x 8 h x 70% = 1,260 billable hours. 60,000 / 0.75 = 80,000 profit before tax, plus 10,000 expenses = 90,000 revenue, / 1,260 = 71.43.

Adding a 10% margin

Input

Same as above with a 10% extra margin

Output

$100,000 revenue, $79.37 an hour

Revenue is grossed up so that 10% of it is left after costs, tax and pay: 90,000 / 0.9 = 100,000.

Billing less of your time

Input

Same as the first case at 50% billable

Output

$100.00 an hour

Only 900 hours are billed, so each must earn more. Utilisation moves the rate as much as the income target does.

Background and insight

The model works in four steps. Working days = 52 x days per week - vacation - holidays - sick days. Billable hours = working days x hours per day x billable share. The profit you need before tax = target income / (1 - tax rate). Revenue = (profit before tax + expenses) / (1 - extra margin). The hourly rate is revenue / billable hours and the day rate is that times your hours per day.

The tax rate is the effective rate on your business profit, not your top marginal rate. In the United States a self-employed person pays self-employment tax of 15.3% (12.4% Social Security, up to the annual wage base, plus 2.9% Medicare) on 92.35% of net earnings, and income tax on top; half of the self-employment tax is deductible. In the UK sole traders pay income tax and Class 4 National Insurance on profits. Other countries differ again, so take your figure from last year's return or an accountant.

Employees get benefits that freelancers must pay for themselves: paid leave, sick pay, employer pension contributions and, in the US, part of health insurance. Put health cover, pension contributions you intend to make, software, hardware, insurance, accounting fees and workspace into expenses. That is why freelance rates are often quoted as roughly 1.5 to 2 times the equivalent salaried hourly pay; the calculator shows your own number instead of a rule of thumb.

Common use cases

  • Going freelance

    Translate a current salary into the rate you need to stay at the same standard of living.

  • Setting a day rate

    Quote consulting or contracting work by the day with a figure that covers time off.

  • Annual price review

    Update your rate when expenses, tax or your income target change.

  • Fixed-price quotes

    Multiply estimated hours by your rate to check a project price leaves enough margin.

Tips and limitations

  • Be honest about utilisation. New freelancers often bill well under half their working time while they build a client base.
  • Price fixed-fee projects from the rate but add contingency; scope tends to grow.
  • Charge for value where you can. The calculated rate is a floor that covers your costs, not a ceiling.
  • Set aside the tax on every payment you receive. The tax set aside figure shows how much of the year's profit belongs to the tax authority.
  • Tax rules and thresholds change yearly. This tool uses the single effective rate you enter; it does not compute any country's tax bands.

Frequently asked questions

How much should I charge per hour as a freelancer?

Enough to cover your take-home income, tax and expenses over the hours you can actually bill. For 60,000 take-home, 10,000 expenses, 25% tax and 1,260 billable hours that is about 71 an hour.

How many billable hours are there in a year?

Start with 52 x 5 = 260 days, subtract holidays, vacation and sick days (often 30 to 40), multiply by hours per day, then by the share you bill. 225 days x 8 h x 70% gives 1,260 hours.

How do I convert my salary to a freelance rate?

Enter your current take-home pay as the target, add what your employer paid for benefits you will now buy yourself as expenses, and use a realistic billable share. The result is the rate that matches your current income.

What tax rate should I use?

Your effective rate on business profit: total tax and social contributions divided by profit. In the US include self-employment tax of 15.3% on 92.35% of net earnings as well as income tax.

What is the floor rate?

The hourly rate that only covers business expenses, with nothing left for you or for tax. Charging below it loses money on every hour.

Should my day rate be eight times my hourly rate?

The calculator uses hours per day x hourly rate. Many consultants discount the day rate slightly to encourage longer bookings, or charge more for single days because of travel and setup.

Is there an in-depth guide to the Freelance Rate Calculator?

Yes. “How to Calculate Your Freelance Hourly Rate (and Day Rate)” covers the background, how it works, common pitfalls and worked examples. Read the full guide.

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