Freelance Rate Calculator: Hourly and Day Rate
Enter the take-home income you want, your business costs, your own tax percentage and how much of your time you can really bill. The calculator works back to the freelance hourly rate to charge and the revenue you need each month.
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Formula
Revenue needed = target income ÷ (1 − tax rate) + expensesBillable hours = (52 − weeks off) × hours per week × (1 − non-billable %)Hourly rate = revenue needed ÷ billable hours
Worked example
Target 60,000 after tax, expenses 6,000, tax 25%, 40 hours a week, 6 weeks off, 25% non-billable.
- Profit before tax: 60,000 ÷ 0.75 = 80,000. Revenue: 80,000 + 6,000 = 86,000.
- Billable hours: 46 × 40 × 0.75 = 1,380.
- Hourly rate: 86,000 ÷ 1,380 = 62.32.
- Monthly revenue: 86,000 ÷ 12 = 7,166.67.
Expenses are treated as deductible before tax. Check your own tax treatment.
Another example
Target 40,000 after tax, expenses 4,000, tax 20%, 30 hours a week, 4 weeks off, 30% non-billable.
- Profit before tax: 40,000 ÷ 0.80 = 50,000. Revenue: 50,000 + 4,000 = 54,000.
- Billable hours: 48 × 30 × 0.70 = 1,008.
- Hourly rate: 54,000 ÷ 1,008 = 53.57.
When to use it
Use it when setting a first rate, moving from employment to freelancing, or checking whether a client's budget covers your goals. Re-run it after a change in hours, costs or tax.
Common mistakes
- Dividing a salary by 2,080 hours. Employees are paid for holidays and admin; freelancers are not.
- Forgetting software, insurance, pension saving and slow months.
- Assuming every working hour is billable. Pitching, invoicing and learning are not.
- Pricing an hour at employee wages. A salary of 60,000 is 28.85 an hour over 2,080 hours, far below the rate that gives the same take-home as a freelancer.
How it differs
The salary calculator converts a wage to hourly pay. The employee cost calculator prices an employer's side of a hire. This page works backwards from the income a self-employed person needs, so its rate is usually much higher.
Frequently asked questions
How do I calculate a freelance hourly rate?
Revenue needed = target income ÷ (1 − tax rate) + expenses; rate = revenue ÷ billable hours. For 60,000 after 25% tax and 6,000 expenses: 60,000 ÷ 0.75 + 6,000 = 86,000. With 1,380 billable hours the rate is 62.32.
Why are billable hours so much lower than 2,080?
Freelancers are not paid for time off, admin, finding clients or sending invoices. 46 working weeks × 40 hours × 75% billable = 1,380 hours, not 2,080.
What tax rate should I use?
Use the share of your profit you expect to pay in income and self-employment taxes, based on your own situation. No rate is assumed here because rules differ by country. Ask an accountant if unsure.
Should I charge exactly this rate?
Treat it as a minimum that breaks even on your goals. Many freelancers add a margin for slow months and retirement saving. Market rates, experience and project size also affect what clients will pay. This is an estimate, not financial advice.
How do I convert a salary to a freelance hourly rate?
Do not just divide by 2,080. Add tax, expenses and unpaid time. A 60,000 salary is 28.85 an hour over 2,080 hours, but a freelancer targeting 60,000 after 25% tax and 6,000 of expenses, with 1,380 billable hours, needs 86,000 of revenue, or 62.32 an hour.
How do I calculate a freelance day rate?
Divide the revenue you need by the days you can bill. With 86,000 of revenue, 46 working weeks of 5 days and 75% of days billable (172.5 days), the day rate is 86,000 ÷ 172.5 = 498.55. Compare it with your hourly rate times the hours you really bill in a day.
Should I charge more for short projects?
Often yes. Short jobs cost extra unpaid time in scoping, onboarding and waiting for payment, so the share of non-billable time rises. Raising the non-billable share from 25% to 40% in the example moves the rate from 62.32 to 86,000 ÷ 1,104 = 77.90.