Freelance Hourly Rate Calculator

Start from what you want to keep — your take-home income for the year — and the calculator works backwards to the rate you need to charge. It grosses the income up for tax, adds your business expenses and a profit buffer, then divides by the hours you can actually bill, which is the step most rate calculations get wrong. The answer comes out as an hourly rate, a day rate, a week rate, and a monthly revenue target, plus a quote for any project once you enter its hours.

Switch to Rate → income to go the other way: enter a rate you charge or are considering, and see the take-home pay it adds up to after the same tax, expenses, and time off.

There are no currency symbols, because the maths is the same in any currency — enter every amount in yours.

Why freelance rates look high

A salaried employee is paid for about 2,080 hours a year (40 hours × 52 weeks), including holidays and sick days. A freelancer is paid only for billable hours. Take out 20 vacation days, 10 public holidays, and 5 sick days and a five-day week has 225 working days; then take out the time that goes on finding clients, invoicing, admin, and learning — typically a quarter to a third of it — and only about 1,260 hours a year are paid. On top of that, the freelancer pays for their own equipment, software, insurance, and retirement, and often extra self-employment tax.

That is why the old rule of thumb says to take a salary, divide by 1,000, and charge that per hour. The calculator replaces the rule of thumb with your own numbers.

Compared with a salaried job

The comparison section turns your plan into the salary it's worth. A job is worth more than its salary: the employer also pays health cover, retirement contributions, and payroll taxes — often 20–30% on top. With benefits counted, the equivalent salary is your pre-tax profit divided by 1 plus that percentage. Enter a salary offer and it does the reverse, giving the freelance rate you'd need to come out level with the job.

Example

Take-home 60,000 · Expenses 500/month · Tax 25%
Buffer 10% · 5 days × 8 h · 20 vacation, 10 holidays, 5 sick · 70% billable

Hourly rate 75.08 · Day rate 600.63
Revenue 94,600 over 1,260 billable hours
Equivalent salary 64,000 (with 25% benefits)

60,000 after 25% tax is 80,000 of profit; with 6,000 of expenses and a 10% buffer the year needs 94,600 of revenue. Spread over 1,260 billable hours that's 75.08 an hour — 2.44 times the 30.77 hourly pay of the equivalent 64,000 salary.

Limitations

• Tax is one flat effective rate. Real income tax has brackets, allowances, and deductions, and self-employment tax rules vary by country — use your previous year's effective rate, or the salary tax calculator, to choose a realistic figure.
• It assumes steady work all year. If you expect gaps between contracts, lower the billable share or raise the buffer.
• Benefits are a single percentage of salary. Check what a specific employer actually offers before comparing a job offer.

How do I calculate my freelance hourly rate?

Add your target take-home income grossed up for tax to your yearly business expenses, add a buffer for slow months, then divide by your billable hours. For 60,000 take-home at 25% tax, 6,000 of expenses, and a 10% buffer, you need 94,600 a year. At 1,260 billable hours that's about 75 an hour.

How many billable hours does a freelancer have in a year?

Usually 1,000 to 1,500. A five-day week has 260 days; after roughly 35 days of vacation, holidays, and sick time there are about 225 working days, or 1,800 hours. Admin, sales, invoicing, and learning typically take 25–40% of that, leaving around 1,100–1,350 hours you can bill.

How do I convert a salary to a freelance hourly rate?

A quick rule is salary ÷ 1,000: a 70,000 salary means charging about 70 an hour. It works because freelancers bill far fewer hours than the 2,080 an employee is paid for and cover their own benefits and expenses. Enter the salary in the comparison section for a figure based on your own time off, expenses, and tax.

What's the difference between an hourly rate and a day rate?

A day rate is the hourly rate times the billable hours in a day, usually 7.5 or 8. Day rates suit work where hours are hard to track or the client books you for whole days. Some freelancers discount a day rate slightly for the guaranteed booking; the calculator shows the undiscounted figure.

Should I include taxes in my freelance rate?

Yes. Your rate has to cover income tax and, in many countries, a self-employment or social security contribution that an employer would otherwise pay half of. Enter your effective rate — total tax divided by profit — and the calculator grosses up your take-home so the rate covers it. Sales tax or VAT you charge on invoices is separate and not part of your rate.

What is a profit buffer and do I need one?

It's a margin on top of what you need to break even, for late payers, quiet months, equipment that breaks, and growing the business. 10–20% is common. Without one, any month with less work than planned means taking home less than your target.

How do I price a fixed-price project?

Estimate the hours the project will take, multiply by your hourly rate, then add a contingency for revisions and scope creep — often 15–25%. Enter the hours in the project estimate box to get the base figure. If you quote a fixed price, any time over the estimate comes out of your effective hourly rate.