Freelance Hourly Rate Calculator
Example: Target take-home income: 80000 $ · Annual business expenses: 15000 $ · Billable hours per week: 25 hours · Working weeks per year: 46 weeks · Profit margin buffer: 10 %
| Rate you should charge | $91 |
| Billable hours per year | 1,150 |
| Revenue you must bill | $104,500 |
Worked example
Suppose you want $80,000 take-home, have $15,000 of business expenses, bill 25 hours a week for 46 weeks (1,150 billable hours), and want a 10% profit buffer. Your cost base is $95,000, and the buffer lifts required revenue to $104,500. Dividing by 1,150 billable hours gives a rate of about $91 an hour, far above the naive $80,000 divided by 2,080 total hours, which is exactly why so many freelancers underprice.
Frequently asked questions
Why are billable hours so much lower than 40 a week?
Because you also spend time on sales, admin, invoicing, learning, and downtime between projects, none of which a client pays for. Billing 25 of a 40-hour week is common, and pretending you bill all 40 is the core reason freelancers set rates too low.
Should I include my own salary in expenses?
No. Your take-home is the target income, entered separately. Business expenses are the costs of running the business: software, insurance, equipment, marketing, and self-employment tax set-asides.
What is the profit buffer for?
It cushions slow months, non-paying clients, and scope creep, and gives you room to reinvest. A 10 to 20% buffer keeps your target realistic rather than break-even.
Should I really charge that much?
The number is what your goals require; the market decides what it will bear. If the rate feels high, either the market supports it and you were undercharging, or you need to raise billable hours, cut expenses, or move to value-based pricing.