Comprehensive Guide
Learn more in our Business & Tax Guide.
How it works
hourly rate calculator for freelancers takes your inputs and produces required hourly rate, required annual revenue, billable hours per year, daily rate (8 hours). Calculate what to charge per hour — factoring in expenses, taxes, profit, and the hours you actually bill. You provide 5 inputs: Desired annual income (currency, in dollars) (default: 80000 dollars); Annual business expenses (currency, in dollars) (default: 12000 dollars); Effective tax rate (percent, in percent) (default: 25 percent); Billable hours per week (number) (default: 25); Weeks off per year (number) (default: 4). The calculator returns 4 outputs: Required hourly rate (the primary result); Required annual revenue (a secondary output); Billable hours per year (a secondary output); Daily rate (8 hours) (a supplementary figure). Business tax and finance calculations combine multiple moving parts — revenue, expenses, depreciation, tax brackets, and timing — in ways that make back-of-envelope estimates unreliable. This calculator handles the interaction of those variables precisely, so your business decisions rest on real arithmetic. The underlying formula: Required revenue = (Income goal ÷ (1 − Tax rate)) + Expenses | Billable hours = Hours/week × (52 − Weeks off) | Hourly rate = Required revenue ÷ Billable hours With the default values, required hourly rate is computed from the interaction of every input field — change any one of them and the result updates immediately, so you can stress-test different scenarios without re-entering the whole form. Adjust the inputs to match your real financial situation. The defaults are realistic starting points, but every person's circumstances differ — your actual income, expenses, rates, and timelines will produce a different answer. Use the tool iteratively: start with the defaults, then change one variable at a time to see which factor has the largest impact on your outcome.Formula
Required revenue = (Income goal ÷ (1 − Tax rate)) + Expenses | Billable hours = Hours/week × (52 − Weeks off) | Hourly rate = Required revenue ÷ Billable hours
Tips
- Most freelancers bill only 60% of working hours. Track your actual billable percentage.
- Do not forget self-employment tax: it is 15.3% on top of income tax in the US.
- Your hourly rate should be 2–3x what you earned as an employee to account for unpaid time.
- Revisit your rate every 6 months — expenses, taxes, and market rates change.
Frequently asked questions
How much should I charge per hour as a freelancer?
Calculate backwards from your income goal: (Desired income ÷ (1 − tax rate) + expenses) ÷ billable hours per year. Most freelancers need to charge 2–3x their employee hourly equivalent to account for unpaid time, taxes, and expenses.
How many hours can I actually bill per week?
Most freelancers bill 50–70% of working hours. Administrative tasks, marketing, invoicing, and unpaid time off eat the rest. Track for a month to find your actual percentage.
What does the hourly rate calculator for freelancers calculate?
It takes desired annual income, annual business expenses, effective tax rate, billable hours per week, weeks off per year as inputs and computes required hourly rate, required annual revenue, billable hours per year, daily rate (8 hours). The primary output is required hourly rate. Calculate what to charge per hour — factoring in expenses, taxes, profit, and the hours you actually bill.