Freelance Hourly Rate Calculator
The hourly rate you need to hit an income target.
Input sheet
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The biggest reason freelancers undercharge is treating their salary target as the rate — ignoring that only a fraction of working hours are billable and that business expenses come out of what they earn. This calculator works backward from the income you actually want to keep.
How it works
Target income plus expenses, divided by billable hours per year (billable hours/week × working weeks).
It sums your target income and your yearly business expenses, then divides by the billable hours you realistically log — billable hours per week times your working weeks. The expenses are added in because they are paid out of revenue, not magically separate from it.
Note the gap between hours worked and hours billed. Admin, sales calls, invoicing, and marketing are real work that no client pays for directly, so a 40-hour week often yields only 20–25 billable hours. Pricing as if every hour bills is the fastest route to burnout at a loss.
Hourly rate = (Target income + Yearly expenses) ÷ (Billable hours per week × Working weeks per year).
Worked examples
Target $90,000, with 25 billable hours a week, 46 working weeks, and $12,000 of expenses. → $89 per hour (about $710 per 8-hour day).
Billable hours are 25 × 46 = 1,150 per year. You need to cover $90,000 + $12,000 = $102,000, and $102,000 ÷ 1,150 ≈ $88.70, rounded up to $89.
Same $90,000 target but only 20 billable hours a week over 48 weeks, $8,000 expenses. → $103 per hour.
20 × 48 = 960 billable hours; $98,000 ÷ 960 ≈ $102.08, rounded up to $103 — fewer billable hours force a higher rate.
Tips & gotchas
- Be honest about billable hours — overestimating them is the classic way to set a rate that leaves you working unpaid overtime.
- Add a buffer for taxes and unpaid time off; this rate covers income and expenses but not what the tax authority will take.
- Subtract holidays, sick days, and admin time from your working weeks before you trust the number.
- Treat the result as a floor, not a ceiling — price up for rush work, scarce skills, or high-value outcomes.
FAQ
Why are my business expenses added to the income target?
Expenses are paid out of the money you bill, so they have to be earned on top of your take-home target. Folding them in ensures your rate actually covers both.
What counts as a billable hour?
Only time a client directly pays for. Admin, marketing, invoicing, and sales are essential but unpaid, which is why billable hours are usually well below total hours worked.
Does this rate include taxes?
No. It covers your target income plus business expenses. You still need to set aside money for income and self-employment taxes on top of this rate.
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