Freelance hourly rate calculator
The usual mistake is dividing a target salary by 2,080 hours. A freelancer does not bill every hour worked, takes unpaid holiday, pays business costs, and settles tax out of gross revenue. All four belong in the sum.
- Day rate at seven hours
- $382.23
- Revenue you must invoice
- $57,143
- Billable hours a year
- 1,047
- Hours you work but cannot bill
- 564
- Tax and contributions
- $17,143
- The naive rate most people quote
- $22.36
The formula
Billable hours = weeks × hours × billable share. Revenue needed = (target + costs) / (1 − tax rate). Rate = revenue needed / billable hours.
Worked example
To take home 36,000 with 4,000 of costs at a 30% tax rate, working 46 weeks of 35 hours with 65% billable: 1,047 billable hours and a rate of 54.60. Dividing 36,000 by 1,610 worked hours would have suggested 22.36.
How to use it
- 1Count weeks you actually work: 52 minus holiday, public holidays and an allowance for illness.
- 2Be honest about the billable share. Selling, quoting, admin, invoicing and learning are real hours that no client pays for; 60% to 70% is typical.
- 3Business costs mean software, hardware, insurance, accounting, workspace and travel — everything you would not pay as an employee.
Questions people ask
My rate looks far too high to win work.
That is the useful information. Either the market rate is below what you need, in which case the target or the cost base has to change, or you were previously underpricing and absorbing the difference in unpaid hours.
Should I quote hourly or per project?
Quote per project where you can, and use this rate to price it. Clients buy outcomes, and a project price rewards you for getting faster rather than penalising it.
Last reviewed: 2026-10-20