Freelance Hourly Rate Calculator
Work out the hourly rate you actually need to charge — after taxes, expenses, and unbillable hours.
What you want to keep in your pocket after taxes.
Not every hour is paid — admin, sales, and emails take a big cut. 60–70% is realistic.
Your Hourly Rate
Day Rate (8h)
$712
Weekly Rate
$1,870
Most freelancers set their rate by taking their old salary, dividing by 2,080 hours, and adding a bit. That calculation is wrong in three separate ways, and it is why so many freelancers work harder than they did as employees while earning less. This calculator does the arithmetic properly.
Why your salary is the wrong starting point
As an employee, your employer paid for things you never saw on your payslip: half your payroll tax, your health cover, your equipment, your paid holiday, your sick days, your pension contribution. Your salary was maybe 70% of what you actually cost them. As a freelancer, all of that is yours. And there is a second problem: you do not bill 40 hours a week. You bill maybe 25. The rest goes to finding clients, writing proposals, sending invoices, chasing payment, and doing your accounts. That time is real work and it pays nothing. So the real calculation runs backwards: start from what you want to keep, gross it up for tax, add your business costs, then divide by the hours you can actually bill — not the hours you work. That is why a $60,000 salary does not become $30 an hour. It becomes closer to $70.
The formula
Pre-Tax Income = Desired Take-Home ÷ (1 − Tax Rate)
Revenue Needed = Pre-Tax Income + Business Expenses
Billable Hours = (52 − Weeks Off) × Hours/Week × Billable%
Hourly Rate = Revenue Needed ÷ Billable Hours
Example: want $60k, 25% tax, $6k expenses, 30h/week, 6 weeks off, 70% billable
Pre-tax = $80,000 Revenue = $86,000
Hours = 46 × 30 × 0.70 = 966
Rate = $89/hourThe billable percentage is the number people always forget. At 70%, roughly three hours of every ten are unpaid — and your rate must absorb them.
Setting a rate you can defend
- 1Track your billable percentage for a month before guessing at it. Most freelancers assume 80% and discover the reality is closer to 55%. That difference alone is a 45% error in your rate.
- 2Price the outcome, not the hour, once you can. A logo that takes you three hours because you have done it a thousand times is not worth three hours of your rate — it is worth what it does for the client.
- 3Raise rates on new clients first. It is far easier to quote a higher number to someone who has never paid you than to renegotiate with someone anchored to your old price.
- 4Your rate must cover the gaps between projects. Freelance income is lumpy. A rate that works only when you are fully booked is a rate that fails in the quiet month.
- 5If nobody ever pushes back on your price, it is too low. Losing some proportion of quotes is the signal that you are priced correctly — winning every single one means you are the cheap option.
Frequently asked questions
Why is my freelance rate so much higher than my old salary?
Because it has to cover everything your employer used to. Payroll tax, health cover, equipment, software, holiday, sick leave, pension, and the 30–40% of your week that is unbillable admin. A $60k salary genuinely does correspond to roughly $85–90 an hour freelance — that is not greed, it is arithmetic.
What billable percentage is realistic?
60–70% for an established freelancer with steady clients. Below 50% if you are new and spending most of your time on outreach. Track it for a month — the honest number is almost always lower than the number you assumed.
Should I charge hourly or per project?
Per project, once you can estimate reliably. Hourly punishes you for being fast — you get paid less for the same result as you improve. But you still need to know your hourly rate, because it is how you sanity-check whether a project price is worth it.
What expenses should I include?
Everything the business genuinely costs: software subscriptions, hardware amortised over its life, internet, coworking or a share of rent, accounting, insurance, professional development, and any tools specific to your work. Under-counting these means quietly paying for your job out of your own income.
Is the tax rate here accurate for me?
It is a placeholder. Self-employment tax varies enormously by country, and in many places freelancers pay both halves of payroll tax where employees pay one. Use your actual effective rate including self-employment tax, not your income tax bracket alone.