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Freelance rate calculator

Freelance rate calculator: what you actually need to charge

Most freelancers price against what the last client paid. This works backwards from the income you need, the hours you can genuinely bill, and the money that leaves before you see it.

$

What you need to keep, per year, after tax

$

Software, hardware, insurance, accountant, workspace

%

The share of gross income you put aside for tax

Not hours worked — hours a client actually pays for

52 minus holidays, sick days, and gaps between contracts

Minimum hourly rate

$94.20/hour

Day rate (8h)
$754
Week rate
$2,355

The arithmetic

Take-home + expenses
$78,000
Tax set aside
+ $30,333
Revenue you must bill
$108,333
Billable hours per year
÷ 1,150
Minimum hourly rate
$94.20

This is a floor, not a price. It is the rate below which the year does not cover itself. What you quote should also carry the value of the outcome, the risk you absorb, and what the market pays for your track record.

Tax set-aside is your estimate, not a rate we calculate. Your actual liability depends on where you live, your business structure, and your deductions. Invoicito does not provide tax, accounting, or legal advice — use your own figure, or ask your accountant for one.

The arithmetic, in full

There is no secret to a freelance rate. It is four numbers and two divisions — but each of the four is one most people guess at, and guessing low on any of them sets the rate too low for a year.

  • Start with the take-home income you need, not the salary you used to earn
  • Add annual business expenses — software, hardware, insurance, accountant, workspace
  • Gross up for the tax and self-employment contributions you set aside
  • Divide by billable hours per week multiplied by working weeks per year

Billable hours are the number everybody gets wrong

A forty-hour week is not forty billable hours. Pitching, invoicing, admin, marketing, and the client call that produced nothing are all unpaid, and they are most of the gap between a rate that looks fine and a year that does not.

  • Full-time freelancers typically bill 20-30 hours of a 40-hour week
  • Count holidays, sick days, and the weeks between contracts in your working weeks
  • New freelancers should assume fewer billable hours, not more
  • If your billable hours rise later, that is margin — not a reason to have priced low now

From the minimum viable rate to the rate you quote

What this calculator produces is a floor: the number below which the year does not work. It is not your price. Your price also carries the value of the outcome, the risk you absorb, the speed you deliver at, and whatever the market pays people with your track record. Knowing the floor is what lets you negotiate without accidentally going under it.

  • Treat the result as the minimum, then price project work above it where you can
  • Quote projects rather than hours where the outcome is worth more than the time
  • Build a buffer for revisions and scope creep into project prices — they are certain, not possible
  • Re-run the numbers annually; expenses and expectations both drift
  • A day rate is not simply eight times the hourly rate if a booked day displaces other work

FAQ

Common questions

How do I calculate my freelance hourly rate?

Add your target income and your annual business expenses, gross the total up for the tax you set aside, then divide by the number of hours you can genuinely bill in a year — billable hours per week times working weeks. That produces the floor your rate has to clear.

How many hours a week can a freelancer actually bill?

Most full-time freelancers bill 20-30 hours of a 40-hour week once admin, pitching, invoicing, and marketing are accounted for. Building your rate on 40 billable hours is the single most common way freelancers end up underpaid.

What expenses should I include?

Everything the business pays for that a job would otherwise cover: software subscriptions, hardware replacement, insurance, accountancy, professional memberships, workspace, and equipment. Annual costs go in as annual figures.

Should I charge hourly or per project?

Use the hourly figure as your floor and quote projects wherever the outcome is worth more than the hours it takes. Project pricing rewards you for being fast, which hourly billing quietly penalises.