FreeCalculators

Hourly Rate Calculator for Freelancers

Determine your ideal hourly rate as a freelancer by considering expenses, taxes, and profit to ensure you get paid what you deserve.

Business & Tax · Reviewed by FreeCalculators Editorial · Updated 2026-09-01

Your details

Software, equipment, insurance, marketing, coworking.

Income tax + self-employment tax combined.

Only count hours you actually bill. Most freelancers bill 60% of working hours.

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How it works

The Hourly Rate Calculator for Freelancers helps you determine the ideal hourly rate by factoring in your income goals, expenses, taxes, and available billable hours. The formula used is: Required Revenue = (Income Goal ÷ (1 - Tax Rate)) + Expenses. For example, if your annual income goal is $80,000, annual expenses are $12,000, and your tax rate is 25%, your required revenue would be calculated as follows: Required Revenue = ($80,000 ÷ (1 - 0.25)) + $12,000 = $106,667. Next, we calculate billable hours: Billable Hours = Billable Hours per Week × (52 - Weeks Off). If you plan to work 25 billable hours a week and take 4 weeks off, your total billable hours would be 25 × (52 - 4) = 1,200. Finally, the hourly rate is found by dividing the required revenue by the billable hours: Hourly Rate = $106,667 ÷ 1,200 = $88.89. This means you should charge approximately $88.89 per hour to meet your financial goals.

Formula


                Required revenue = (Income goal ÷ (1 − Tax rate)) + Expenses | Billable hours = Hours/week × (52 − Weeks off) | Hourly rate = Required revenue ÷ Billable hours

Tips

  • Regularly review your expenses to ensure you're accurately calculating your required hourly rate.
  • Consider increasing your billable hours by improving your efficiency or taking on more projects.
  • Factor in potential client payment delays by building a buffer into your income goals.
  • Adjust your rates periodically based on market trends and your growing expertise.

Frequently asked questions

How do I calculate my required revenue?
Required revenue is calculated using the formula: (Income Goal ÷ (1 - Tax Rate)) + Expenses.
What if I work more or fewer billable hours?
Your hourly rate will change based on the total billable hours; more hours lower the rate, while fewer hours increase it.
How should I handle taxes in my calculations?
Always include your expected tax rate in your calculations to ensure your income goal is met after taxes.
Can I use this calculator if I have fluctuating income?
Yes, but it's best to use an average income goal based on your past earnings for more accurate results.