Freelance Hourly Rate Calculator

How to use this calculator

Enter your target take-home pay. The amount you want to keep after tax and expenses, not your revenue goal.
Add your business expenses. Software, insurance, equipment, accounting, coworking, payment fees.
Set your effective tax rate. Income tax plus self-employment tax. 25 to 35 percent is typical for solo freelancers in the US.
Set your billable ratio. The honest share of working hours you can invoice. Most freelancers overestimate this badly.

The formula

Required rate = (Take-home + Expenses) / (1 - Tax rate) / (Hours per week x Weeks per year x Billable ratio)

Two things push this number higher than people expect. Tax applies to profit, so you must gross up rather than add a flat percentage. And billable hours are far fewer than working hours: a 40 hour week at a 60 percent billable ratio is 24 invoiceable hours, not 40.

Worked example

Take-home target $60,000, expenses $8,000, 30 percent tax, 40 hours a week, 46 weeks, 60 percent billable:

Gross revenue needed: ($60,000 + $8,000) / 0.70 = $97,143
Billable hours: 40 x 46 x 0.60 = 1,104 hours
Required rate: $97,143 / 1,104 = $87.99 per hour

Notice the gap: the freelancer wants $60,000 but must charge $88 an hour. Charging $50 an hour, a number that feels reasonable, produces about $55,000 in revenue and roughly $30,000 take-home.

Typical billable ratios by type of work

Work type	Typical billable ratio	Why
Retainer clients, established	70 to 80%	Little sales time, predictable scopes
Project work, repeat clients	60 to 70%	Some scoping and admin overhead
Project work, new clients	45 to 60%	Sales calls, proposals, onboarding
Consulting with heavy marketing	35 to 50%	Content, outreach, and pipeline work

Common mistakes

Treating take-home as revenue. To keep $60,000 you need roughly $95,000 to $100,000 in billings. Most new freelancers discover this in month four.
Assuming 40 billable hours a week. You cannot bill 100 percent of your time. Chasing invoices, writing proposals and answering email are unpaid.
Forgetting unbillable holidays. 52 weeks is not 52 working weeks. Use 45 to 47.
Ignoring payment processing fees. At 3 percent on $97,000 that is nearly $3,000 a year. Put it in expenses.
Setting the rate once and never revisiting. Recalculate every six months; expenses and tax rates move.

Frequently asked questions

What is a billable ratio?

The share of your working hours you can actually invoice. Admin, sales, email and learning time are not billable. Most solo freelancers bill 50 to 70 percent of their working hours.

Should I charge hourly or per project?

Use the hourly rate as your internal floor, then quote fixed prices per project. Fixed pricing rewards efficiency; hourly pricing penalises it, because the faster you get the less you earn.

Why is my required rate higher than what competitors quote?

Usually because you are comparing a rate that must cover tax, expenses and unbillable time against a rate someone quotes as pure take-home pay. Compare gross to gross.

Does this include retirement savings?

Only if you include them in your take-home target. A common approach is to add 10 to 15 percent of target income for retirement and treat it as a required expense.

How do I raise my rate without losing clients?

Raise it for new clients first, then apply it to existing clients at contract renewal with 30 to 60 days notice. Grandfather long-term clients at a smaller increase if you need to keep them.

Profit Margin Calculator Margin and markup from cost and price, plus target pricing. Calculate margin →

Invoice Generator Build a printable invoice with line items and tax. Build invoice →