Your freelance hourly rate is your yearly take-home target plus your business costs, divided by one minus your tax set-aside, divided by the hours you can bill in a year. Put in five numbers below and the calculator does that arithmetic for you, including the weeks you won't be working.
It's a calculator, not advice. Your tax set-aside is your own figure, so ask your accountant what it should be.
The trap that sinks most first rates
Most people work out a rate by dividing the money they want by 40 hours a week and 52 weeks a year. That sum assumes you never take a day off and that every hour you work is an hour a client pays for. Neither is true.
A freelance week has admin, invoicing, chasing payments, pitching, learning and the odd quiet spell between projects. None of that is billable, yet it all takes time. If you price as if every working hour is billable, you'll hit a full diary and still miss your target. The same goes for the weeks you're off: holidays, public holidays and sick days still have to be paid for by the hours you do bill.
So this calculator asks for billable hours per week, not working hours, and it takes your days off out of the year before it divides. The result box also shows what you'd have charged on the 40-hour assumption, so you can see the gap in your own numbers. If you're just starting out, freelancing for beginners covers the rest of the setup.
Freelance rate calculator
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What to put in each box
- Take-home target: what you want to keep for yourself in a year, after business costs and tax.
- Business costs: everything you pay to run the business. Software subscriptions, a laptop spread over its life, insurance, accountancy, training, travel to clients, a pension if you pay into one.
- Weekdays off: count holidays, public holidays and a realistic number of sick days. The calculator starts from 260 weekdays in a year and subtracts these.
- Billable hours per week: the hours a client pays for, not the hours you sit at your desk. Be honest here. This box moves the answer more than any other.
- Tax set-aside: the share of your income you put aside for tax and similar contributions. It depends on where and how you work, so this is your number to get from your accountant, not ours to guess.
A worked example, step by step
Here's the calculation with made-up inputs, so you can follow each step and check the tool against it.
- Take-home target: 40,000. Business costs: 6,000. Together that's 46,000.
- Tax set-aside: 25%, so you keep 75% of what you invoice. 46,000 / 0.75 = 61,333 to invoice a year (rounded).
- Weekdays off: 35. 260 - 35 = 225 working days, which is 45 working weeks.
- Billable hours: 25 a week x 45 weeks = 1,125 billable hours a year.
- Hourly rate: 61,333.33 / 1,125 = 54.52.
Now the trap in numbers. Price the same year on 40 billable hours a week and you'd divide by 1,800 hours instead, which gives 34.07 an hour. Fill 25 billable hours a week at that rate and you'd invoice about 38,333, well short of the 61,333 you need. Same person, same year, a very different result.
Once you have your number, think about how you'll present it. Some freelancers quote the hourly rate, others turn it into a day rate or a project fee built on the hours they expect a job to take. There's more on that choice in AI freelance pricing and rates.
Related reading
- Freelancing for beginners
- AI freelance pricing and rates
- How to become a social media influencer, if your freelance work is content creation
- Influencer rate calculator, for pricing a single sponsored post
Freelance rate FAQs
How do I calculate my freelance hourly rate?
Add your yearly take-home target to your business costs, divide by one minus your tax set-aside, then divide by the hours you can bill in a year. The calculator on this page does it for you.
Why not just divide my target salary by 40 hours a week?
Because not every working hour is billable and you won't work every week of the year. Admin, pitching and time off all have to be paid for by the hours you do bill.
What tax percentage should I use?
Use the figure your accountant gives you. It depends on where you live, how your business is set up and what you earn, so the calculator leaves it as your own input.
Is this financial or tax advice?
No. It's arithmetic on the numbers you type in. Check your figures with a qualified accountant before you rely on them.
How many billable hours a week should I put in?
Put in the hours you realistically expect clients to pay for, based on your own diary. Track a few weeks of your time if you're not sure.
Can I turn the hourly rate into a day rate?
Yes. Multiply the hourly rate by the billable hours in a typical working day. Keep the same hours you used in the calculator so the numbers still add up.
