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Freelance rate calculator

Work backwards from what you want to keep. Take your target take-home pay, gross it up for tax, add your business costs, then divide by the hours you can actually bill, which for most people is around 60% of the hours they work. Dividing a salary by 2,080 hours is the mistake that keeps freelance rates too low.

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Your year

$

After tax. What actually reaches your account.

$

Software, insurance, accountant, hardware, workspace.

52 minus holiday and illness.

%

A rough set-aside, not a tax calculation.

60%

Sales, quoting, admin and invoicing are not billable. Most people land between 50% and 70%.

Charge at least

$83.10

an hour

Day rate

$623.25

Week

$3,116.25

That rate is worth $49.86 across every hour you work, because 690 of your 1,725 hours a year are not billable. That gap is the whole reason the headline number looks large.

Three versions of the same year
Year Hourly Day
Getting by A quarter less income, same working pattern. $63.77 $478.28
Your target What you said you want to take home. $83.10 $623.25
A good year A third more income, and one day a week back. $135.75 $1,018.13
Show the arithmetic
Take-home target
$60,000.00
Divided by (1 − 25% tax)
$80,000.00
Plus business costs
$86,000.00
Billable hours a year
1,035.0
Revenue ÷ billable hours
$83.10

How this works

The order matters. Grossing up for tax is a division, not an addition: if you want to keep $60,000 and set aside 25% for tax, you need $80,000 of profit, not $75,000. Adding the percentage instead of dividing by it is the most common arithmetic error in freelance pricing advice, and it leaves people about 6% short every year.

Business costs are added after that, because they come out before tax rather than after it.

Then the division. Not by 2,080 hours, which is the salaried convention and assumes you never take a day off and never spend an hour on anything unpaid. By the hours you can actually bill: working weeks, times days, times hours, times the share of that time that is billable at all.

This is a pricing floor, not a price. It is what you have to average to hit your target. Charging it is the minimum; the reason to track your time is to find out whether you actually are.

Where the numbers come from

Nothing here is tax advice, and the tax field is a set-aside percentage rather than a calculation of what you owe. Rates, thresholds and allowable expenses differ by country and by how you are set up, so check the provision with your accountant.

Stop doing this by hand

FlatHours turns tracked time into invoices that get paid, at a flat price with nothing metered. Free for one person, forever.

Start free See the pricing

Questions

How do I work out my freelance hourly rate?

Start from what you want to take home, not from what you want to bill. Gross that figure up for tax by dividing (not by adding a percentage), add your annual business costs, then divide by the hours you can realistically bill, which is far fewer than the hours you work. That is the whole method, and it is what this calculator does.

Why is my freelance rate so much higher than an equivalent salary?

Because the rate has to cover everything a salary hides: unpaid holiday, sick days, pension, equipment, software, insurance, accountancy, and every hour spent selling, quoting and doing admin. A salary is paid for 52 weeks; you bill for far less than that.

What percentage of my time can I actually bill?

For most independent people it lands between 50% and 70% once sales, admin, invoicing, and project management are taken out. If you have never measured it, 60% is a fair starting assumption and tracking your time for a month will tell you the real figure.

How many working weeks should I assume in a year?

46 is a realistic default: 52 weeks minus a fortnight of holiday, public holidays, and about a week of illness or other loss. Using 52 is the single most common way people underprice, because it quietly assumes you never take a day off.

How do I turn an hourly rate into a day rate?

Multiply by the hours in your working day, and be honest about that number. A day rate built on eight billable hours assumes a day with no email, no calls and no admin in it.

Should I charge by the hour at all?

Often not. An hourly rate punishes you for getting faster, which is the opposite of what experience should be worth. The number this calculator gives you is still the right floor to price a fixed fee against: work out the hours the job will take, apply this rate, and quote that as a price.

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