Freelance Rate Calculator
Find the hourly and day rate you need to charge to take home the income you want, once costs, tax, holidays and unpaid admin time are paid for.
The money you want to keep for yourself after tax.
Software, equipment, insurance, coworking, phone, accountant. Advanced lets you list them.
Fill in any of these and the total goes into Business costs above. Spread big buys over their life: a laptop every 3 years is a third of its price a year.
A rough share for income tax and social charges where you live. It is a flat estimate, not any country's rules.
No employer pays into a pension for you, so set some aside.
Include public holidays and a few sick days.
The share of your hours a client pays for. The rest is admin, sales, emails and invoicing.
Money the business keeps for quiet months, late payers and growth.
What a freelance marketplace, agency or payment app takes from each invoice.
Pension, health cover and other benefits a job pays on top. Paid holiday is already in your days off.
Room for changes and things that take longer.
Stock photos, travel, printing, hosting.
Leave empty to use the rate worked out above.
Where your rate goes
| Part of your rate | An hour | A year | Share |
|---|
Your rate at other billable times
| Billable time | Hours a year | Hourly | Day rate |
|---|
How your freelance rate is worked out
Hourly rate = (pay before tax + business costs) ÷ billable hours a year.
- 1
Pay before tax
$45,000 ÷ 75%= $60,000
- 2
Money to bill a year
$60,000 + $9,000= $69,000
- 3
Billable hours
230 days × 8 h× 75% billable= 1,380 hours
- 4
Your hourly rate
$69,000 ÷ 1,380= $50 an hour
Read more: the formula, a worked example, billable time, fees and the employee comparison
A freelance rate has to pay for much more than the hours you spend on client work. Nobody pays you for holidays, sick days, admin, finding clients or the software you use, and no employer adds a pension or insurance. So the rate is your whole year's needs divided by the hours you can actually bill.
The formula
pay before tax = take-home ÷ (1 − tax % − savings %)
money to bring in = (pay before tax + business costs) ÷ (1 − profit buffer %)
money to bill = money to bring in ÷ (1 − fees %)
working days = days a week × 52 − days off
billable hours = working days × hours a day × billable %
hourly rate = money to bill ÷ billable hours
day rate = hourly rate × hours a day
Worked example
You want to take home $45,000 a year, your business costs are $750 a month, and you set aside 25% of your pay for tax.
- Pay before tax: $45,000 ÷ (1 − 0.25) = $60,000, of which $15,000 is tax.
- Business costs: $750 × 12 = $9,000. Money to bill: $60,000 + $9,000 = $69,000.
- Working days: 5 × 52 = 260, minus 6 weeks (30 days) off = 230 days. At 40 hours a week that is 8 hours a day, so 1,840 hours.
- Billable hours: 1,840 × 75% = 1,380 hours, or 172.5 full days.
- Hourly rate: $69,000 ÷ 1,380 = $50 an hour. Day rate: $50 × 8 = $400. Week rate: $50 × 40 = $2,000.
Why billable time matters so much
Most freelancers spend a quarter to a half of their working time on unpaid work: replying to emails, quotes, invoices, bookkeeping, marketing and learning. In the example, billing 100% of the time would need only $37.50 an hour, but at 50% billable you would need $75. Be honest here: a rate built on hours you can't fill means a smaller income.
Savings, profit buffer and fees
Savings and tax are both taken from your pay, so with 25% tax and 10% savings, $45,000 take-home needs $45,000 ÷ 0.65 = $69,230.77 of pay. A profit buffer is worked out on the money you bring in: a 10% buffer means dividing by 0.9. Platform and payment fees come off each invoice, so a 5% fee means dividing by 0.95 to still end up with the money you need.
Freelance rate against a salary
An employee on $50,000 is paid for 52 weeks of 40 hours, so $50,000 ÷ 2,080 = $24.04 an hour, including paid holidays. If the employer adds 20% in pension, health cover and other benefits, the job is worth $60,000. To match it you need $60,000 of pay plus $9,000 of costs from 1,380 billable hours: $50 an hour, about 2.1 times the employee's hourly pay. That is why freelance rates often look high next to salaries.
Quoting a project
quote = hours × (1 + contingency %) × hourly rate + costs passed on
A 40-hour website with 15% contingency is 40 × 1.15 = 46 hours. At $50 an hour that is $2,300, and with $200 of stock photos and hosting the quote is $2,500. If you quote in days, each day counts as your normal working day (8 hours in the example).
Tips for setting your rate
- Check what others in your field and country charge, then pick the higher of that and your own number.
- Round up to a tidy figure. Clients rarely notice the difference between $50 and $55, but over 1,380 hours it is $6,900 a year.
- Raise your rate each year for rising costs, and for new clients first.
- Ask for a deposit on projects, and keep a few months of costs in the bank for slow periods.
Tax here is one flat % of your pay that you choose, so it works anywhere. Real income tax usually rises in bands and social charges have their own rules in each country, so use your own effective rate or ask a local accountant. The 20% for employer extras is only a starting guess; change it to match the job you are comparing.
Common questions
How do I work out my freelance hourly rate?
Work out the pay you need before tax, add your business costs, and divide by the hours you can actually bill in a year. For $45,000 take-home with 25% tax you need $60,000 of pay. Add $9,000 of costs to get $69,000. With 1,380 billable hours, that is $69,000 ÷ 1,380 = $50 an hour.
How many billable hours does a freelancer have in a year?
Far fewer than an employee is paid for. A five-day week gives 260 days a year. Take off 6 weeks of holidays and that leaves 230 days, or 1,840 hours at 8 hours a day. If a quarter of your time goes on admin, sales and emails, you can bill 75% of that: 1,380 hours.
What day rate should I charge?
Multiply your hourly rate by the hours in your working day. At $50 an hour and an 8-hour day, your day rate is $400, and a full week is $2,000. The day rate already allows for holidays, admin time and costs, because the hourly rate it comes from does.
How does a freelance rate compare with a salary?
An employee on $50,000 is paid for every hour of a 40-hour week, so about $24.04 an hour. They also get extras such as pension and insurance, which we take as 20%, worth $60,000 in all. To match that you need $60,000 of pay plus your costs from 1,380 billable hours: $50 an hour, about twice as much.
Should I add a profit margin to my rate?
Yes, if you can. A profit buffer is money the business keeps for quiet months, late payers and new equipment. With a 10% buffer you need $69,000 ÷ 0.9 = $76,666.67 a year, which is $55.56 an hour instead of $50.
How do I quote a fixed price for a project?
Estimate the hours, add a contingency for things that take longer, multiply by your hourly rate, then add any costs you pass on. A 40-hour job with 15% contingency is 46 hours. At $50 an hour that is $2,300, and with $200 of costs the quote is $2,500.
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