Freelancer Hourly Rate Calculator
Work backward from your desired income to find the rate you need to charge.
Not all working hours are billable — admin, sales, and breaks aren't.
52 minus vacation, sick days, and holidays.
What is it?
This calculator works backward from your desired take-home income to find the hourly rate you need to charge clients, accounting for business expenses, non-billable time, and a profit margin buffer.
Formula
Required Revenue = (Desired Income + Expenses) × (1 + Profit Margin%)
Hourly Rate = Required Revenue ÷ (Billable Hours per Week × Weeks per Year)
Formula Explanation
Freelancers often undercharge by dividing their target salary by total working hours, forgetting that a large share of time goes to admin, marketing, and unpaid gaps between projects — not all hours are billable. This calculator only divides by your realistic billable hours, and adds business expenses and a profit margin on top of your target income.
Example Calculation
Targeting a $1,200,000 take-home income with $100,000 in expenses and a 15% margin requires $1,495,000 in revenue. At 25 billable hours/week for 46 weeks/year (1,150 billable hours), that's an hourly rate of about $1,300.
How to Use
- Enter the annual take-home income you want to earn.
- Enter your annual business expenses — software, equipment, insurance, etc.
- Enter your realistic billable hours per week and working weeks per year (not 52 — leave room for time off).
- Adjust the profit margin buffer, then read off your required hourly and day rate.
Benefits
- Uses billable hours instead of total working hours, avoiding the most common freelancer pricing mistake.
- Bakes in business expenses so your rate actually covers your real costs, not just take-home pay.
- Adds a profit margin buffer for taxes, slow months, and unpaid invoices.
Use Cases
- Setting your freelance or consulting rate when starting out or raising prices.
- Sanity-checking whether a client's offered rate actually meets your income goals.
- Comparing hourly vs. day-rate pricing when quoting a project.
What Your Result Means
The hourly rate is the minimum you should charge to hit your income goal after covering expenses and non-billable time. Charging less than this means working more hours than planned to reach the same take-home income — or falling short of it.
Tips
- Most freelancers can realistically bill 20-30 hours per week, even working full-time, due to admin and unpaid work.
- Budget for 4-8 weeks a year of unpaid time off, sick days, and gaps between projects when setting weeks per year.
- Revisit this calculation yearly as your expenses, goals, and market rate change.
Common Mistakes
- Dividing target income by all working hours (including unpaid admin time), which undercharges significantly.
- Forgetting to include software subscriptions, equipment, insurance, or other business costs.
- Assuming 52 billable weeks per year with no time off, sick days, or slow periods.
FAQs
How many hours per week are actually billable for freelancers?
Most freelancers can realistically bill 20-30 hours per week even when working full-time, since the rest goes to admin, client communication, marketing, and finding new work.
Why include a profit margin if I already included my desired income?
The margin acts as a buffer for taxes, unpaid invoices, slow months, and unplanned expenses — without it, any disruption can push you below your actual target income.
Should I charge hourly or a flat project rate?
The day rate shown here is a useful reference point for flat-rate project quotes, but many freelancers prefer project-based pricing once they have enough experience to estimate project scope accurately.
This tool provides a starting-point rate estimate — market rates, competition, and experience level should also factor into your final pricing.
Last updated: July 26, 2026