Freelance Hourly Rate Calculator
Updated · By the CalculatorDash editorial team · How we check our maths
Quick answer
Your minimum hourly rate is (target income + business expenses) ÷ (1 − tax rate) ÷ billable hours per year. Most freelancers can only bill 50–70% of their working hours, so a $90,000 goal often needs a rate well above $60 an hour.
How this calculator works
Employees are paid for every working hour, including meetings, holidays and quiet weeks. Freelancers are only paid for billable hours, and they cover their own taxes, tools and time off. That is why a freelance rate that looks high next to a salary often is not.
This calculator works backwards from the income you want to take home. It adds business expenses, grosses up for tax, and divides by the hours you can realistically bill once you allow for time off and non-billable work.
The formula
- Billable hours
- hours per week × (52 − weeks off) × billable share
- Revenue needed
- (income goal + expenses) ÷ (1 − tax rate)
- Hourly rate
- revenue needed ÷ billable hours
Worked example
A designer wants $90,000 a year after tax, spends $9,000 on tools and insurance, and pays about 28% in tax. They need $137,500 in revenue. Working 40-hour weeks, 46 weeks a year with 65% billable, they bill 1,196 hours, so the minimum rate is about $115 an hour.
Tips
- 01This is a floor, not a price. Charge for value and market rates when you can.
- 02Quote by project once you know your speed; it rewards you for getting faster.
- 03Raise rates for new clients first, then for existing clients once a year.
Frequently asked questions
How do I calculate my freelance hourly rate?
Add your income goal and yearly business expenses, divide by (1 − your tax rate), then divide by the number of hours you can bill in a year.
How many hours a year can a freelancer bill?
Many freelancers bill around 1,000–1,400 hours a year. Admin, sales, invoicing and learning take up the rest of a full-time week.
Should I charge hourly or per project?
Hourly is safer when the scope is unclear. Per-project pricing usually earns more once you can estimate accurately, because clients pay for the result rather than your time.
How do I convert my salary to a freelance rate?
A common rule of thumb is to divide your desired salary by 1,000 to get an hourly rate, which roughly covers taxes, benefits and unbilled time. This calculator gives a more precise answer.