Freelance Hourly Rate Calculator
Example: Target take-home income: 85000 $ · Annual business expenses: 15000 $ · Billable hours per week: 25 hours · Working weeks per year: 46 weeks
| Rate you must charge | $87 |
| Annual billable hours | 1,150 |
| Equivalent day rate (8 hrs) | $696 |
Worked example
Say you want to take home $85,000 and have $15,000 of business expenses, so you need to bill $100,000. If you can bill 25 hours a week for 46 weeks, that is 1,150 billable hours a year. Dividing $100,000 by 1,150 gives an hourly rate of about $87. That is far above the roughly $48 an hour that naively dividing $100,000 by a 2,080-hour work year would suggest — which is exactly why so many freelancers underprice themselves.
Frequently asked questions
Why are billable hours so much lower than 40 a week?
Freelancers spend large chunks of time on unpaid work: finding clients, sending proposals, invoicing, admin, and marketing. Twenty to thirty billable hours in a forty-hour week is common and healthy. Entering a realistic billable number is the single most important input, because overestimating it silently pushes your rate too low.
What counts as business expenses?
Software subscriptions, equipment, insurance, accounting fees, your share of self-employment tax, health insurance you now buy yourself, and a home-office allowance. Freelancers must self-fund benefits an employer used to cover, so expenses are usually higher than people expect — do not leave this field near zero.
Should my target income be before or after tax?
This tool treats the target as the take-home you want to keep, and it is cleanest to fold your estimated income and self-employment taxes into the business-expenses field. Alternatively, run our 1099 quarterly tax estimate first, then add that tax figure to expenses here so the rate covers it.
My calculated rate seems too high to win clients. Now what?
That gap is valuable information. You can raise your billable hours, lower expenses, reduce your income target, or move upmarket to clients who pay premium rates. The one thing you should not do is quietly charge a rate that cannot fund your real costs, which is the fast path to burnout.