Freelance Hourly Rate Calculator
Work out what to charge per hour and per day to cover your living costs, taxes, business costs, unpaid admin time and a profit buffer
Financial & Operational Parameters
Many freelancers find that a substantial share of their working week, often a quarter to a third or more, goes to unpaid admin, proposals and prospecting. Your own mix will differ.
Your billable ratio leaves room for admin, sales and a healthy cash buffer
How to use this calculation:
- • Set your personal net income needs, treating your business as a separate financial entity.
- • Be realistic about your billable ratio; many solo consultants plan on roughly 50% to 70%, but your own time records are the best guide.
- • Use the break-even rate as your absolute floor in negotiations and avoid quoting below it.
How to use this tool
- Enter the net monthly income you want to take home and your monthly business overhead.
- Set an estimated tax and social-contribution rate and a profit margin or buffer.
- Enter vacation weeks, sick and holiday days, weekly working hours and the share of hours you can bill.
- Read the hourly and daily rate, the break-even rate and the yearly billing needed.
Worked example
To take home 4,500 a month with 400 of business costs, 20% for taxes and a 15% buffer, working 40 hours a week with 4 weeks of vacation and 10 sick or holiday days, only 65% of hours billable: billable hours are (48 × 40 − 10 × 8) × 0.65 = 1,196 a year. Required billing is 4,500 × 12 ÷ 0.80 + 4,800 = 72,300 at break-even, or 85,058.82 with the buffer. Divided by 1,196 hours, the rate is $71.12 an hour (about $568.96 for an 8-hour day), against a break-even rate of $60.45. Lifting the billable share to 75% would pull the rate down noticeably, which shows why admin time matters.
Why this tool exists and where its numbers come from
Freelancers who bill by the hour need a rate that covers target income, taxes, business costs and the time nobody pays for. The calculator is planning arithmetic on your own assumptions, not a published standard; ask an accountant about the tax rules that apply to you.
No external source is linked for this tool; the formulas are explained in the methodology below.
For the full method, see the Methodology section just below.
Methodology
A common shortcut is to divide the salary you want by 2,080 hours (40 hours × 52 weeks). That quietly assumes every hour of every week is paid by a client. The calculator below removes vacation and sick days first, then counts only the share of hours you can actually invoice, and adds tax and business costs on top.
Marcus, a 32-hour week and the rate he had been underquoting
Marcus is a freelance designer who wants to take home $3,000 a month. He has $250 a month in business costs, plans for 25% tax and contributions and a 10% buffer, takes 5 weeks of vacation and expects 12 sick or holiday days. He works 32 hours a week, and his own time log says about 55% of that is billable.
Step by step. Working time is 47 weeks × 32 hours − 12 days × 6.4 hours = 1,427.2 hours, and 55% of that is about 785 billable hours. Break-even billing is $3,000 × 12 ÷ 0.75 + $3,000 = $51,000; with the buffer it is $56,666.67. Divided by 785 hours, the rate is about $72.19 an hour (about $577.52 for an 8-hour day), against a break-even rate of $64.97.
What he decides. He had been quoting $55 an hour, which is below break-even. Changing only the billable share shows the lever: at 70% the rate falls to $56.72, at 40% it climbs to $99.26. Raising prices and trimming unpaid admin both help. A planning figure, not tax or financial advice.
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Frequently asked questions
Why can't I divide my target annual salary by 2,000 hours? ▼
A salary job pays for holidays, sick days and time spent on internal tasks, and the employer often covers insurance, equipment and part of social contributions. When you invoice by the hour, none of that time is paid unless you build it into the rate. In the example above, a 40-hour week yields only about 26 billable hours (65%), so dividing by 2,000 would understate the rate you need by roughly 40%.
What is a realistic billable ratio for a solo freelancer? ▼
There is no single correct figure; it depends on your field, how many clients you juggle and how much selling you do. Many people start planning with something between 50% and 70% and then compare it with a month or two of honest time tracking. Entering 90% or 100% makes the hourly rate look low but only works if you never spend time on invoices, proposals, learning or gaps between projects.
What should I include under monthly business overhead? ▼
Include costs your business pays before you take a salary: software subscriptions, hosting, accounting fees, phone and internet for work, coworking, professional insurance and a monthly reserve for replacing equipment. Do not include personal rent or groceries, which belong in the target net income, and leave out costs that you pass on to the client at cost.
Which tax rate should I enter? ▼
Enter the share of your pre-tax profit that goes to income tax and mandatory social contributions, as an average, not your top bracket. The calculator applies one flat percentage to your net target, so it cannot reproduce progressive brackets, deductions or VAT. Ask an accountant or check your tax authority's figures, then use this result as a starting point for a quote.