💼 Freelance Hourly Rate Calculator
Find the hourly rate you need to charge to hit your desired net income after business expenses, tax reserve, and non-billable time.
Last Updated: July 10, 2026
Enter Your Details
Software, equipment, insurance, office costs, etc.
Self-employment tax + income tax set-aside, e.g. 25–30%.
52 minus vacation, sick days, and holidays.
Admin, marketing, invoicing — time spent not billing clients.
Your Target Rate
📊 Sample Rate by Billable Hours/Week ($80k income, $8k expenses, 25% tax, 48 weeks, 20% non-billable)
| Billable Hours/Week | Effective Hours/Year | Required Hourly Rate |
|---|---|---|
| 15 | 576 | $203.70 |
| 20 | 768 | $152.78 |
| 25 | 960 | $122.22 |
| 30 | 1,152 | $101.85 |
| 35 | 1,344 | $87.30 |
💡 Billable ≠ Total Hours
A freelancer working 40 hours/week may only bill 25-30 of those hours — the rest goes to admin, marketing, and finding new clients. Your hourly rate must cover income goals using only the hours you can actually invoice.
🧮 How Your Freelance Rate Is Calculated
Step 1: Target Annual Revenue
Target Revenue = (Desired Net Income + Business Expenses) / (1 − Tax Reserve %)
Step 2: Effective Billable Hours
Effective Hours = Billable Hours/Week × Weeks/Year × (1 − Non-Billable %)
Step 3: Hourly Rate
Hourly Rate = Target Revenue ÷ Effective Billable Hours
Example: ($80,000 + $8,000) / 0.75 = $117,333.33 target revenue. 25 hrs/wk × 48 wks × 0.80 = 960 effective hours. $117,333.33 / 960 = $122.22/hr.
💡 Real-World Examples & Use Cases
Three verified examples with different goals and schedules.
$80,000 goal, $8,000 expenses, 25% tax, 25 hrs/wk, 48 wks, 20% non-billable
Target revenue = $117,333.33; effective hours = 960.
Result: Minimum rate = $122.22/hr.
$60,000 goal, $5,000 expenses, 25% tax, 30 hrs/wk, 50 wks, 15% non-billable
Target revenue = $86,666.67; effective hours = 1,275.
Result: Minimum rate = $67.97/hr.
$100,000 goal, $12,000 expenses, 30% tax, 20 hrs/wk, 46 wks, 25% non-billable
Target revenue = $160,000.00; effective hours = 690.
Result: Minimum rate = $231.88/hr.
🔍 People Also Ask
Is my freelance rate the same as a full-time employee's equivalent hourly wage?
No — freelancers must also cover self-employment tax, benefits, equipment, and non-billable time that employers normally absorb, so freelance rates are typically much higher than an equivalent salary/hours calculation.
How do I raise my rates with existing clients?
Give advance notice (30-60 days), tie the increase to added value or rising costs, and apply new rates to new projects first if you want to phase it in.
Should I charge hourly or by project?
Both are valid — many freelancers use this hourly rate calculation to price fixed-fee projects by estimating hours needed and multiplying by their target rate.
⚠️ Common Mistakes & Pro Tips
- Basing your rate only on desired salary: Forgetting expenses and taxes leads to under-charging — freelancers must self-fund benefits and tax withholding that employers normally handle.
- Assuming 40 billable hours/week: Most freelancers can only bill 50-70% of their working hours; the rest goes to admin and marketing.
- Ignoring vacation and sick time: Unlike salaried employees, freelancers don't get paid time off — build fewer working weeks into your calculation.
- Underestimating the tax reserve: Self-employment tax (Social Security + Medicare) plus income tax can easily total 25-35% of revenue for many freelancers.
- Never revisiting your rate: Recalculate at least annually as expenses, goals, and billable capacity change.