Freelance Rate Calculator
Work backwards from the income you want to the rate that gets you there, with the weeks off, the tax and the unbillable half of your week all counted.
What you need to earn
What lands in your personal account, after tax.
Software, insurance, hardware, accountant, desk, phone.
Income tax plus self-employment tax as a share of profit. US sole traders often land between 25 and 35 percent. Ask your accountant for your real number.
Your working year
Holiday, public holidays and the weeks you get sick.
Sales calls, proposals, invoicing, email and your own admin are not billable. Most freelancers who measure it land between 50 and 70 percent, and almost everyone guesses high before they measure.
The year behind that number
- Revenue you need to invoice
- $104,890
- That is, a month
- $8,741
- Weeks you actually work
- 46
- Hours at the desk
- 1840
- Hours you can bill
- 1104
- Billable hours a week
- 24.0
- Hours nobody pays for
- 736
Where each billable hour goes
- Yours to keep
- $63.41
- Tax
- $23.45
- Running the business
- $8.15
What utilization does to the rate
Same income, same expenses, same year. The only thing changing is how much of your week a client actually pays for. This is why chasing a higher rate is usually easier than chasing more hours.
| Billable share | Billable hours a year | Rate needed |
|---|---|---|
| 40% | 736 | $142.51 |
| 50% | 920 | $114.01 |
| 60%yours | 1104 | $95.01 |
| 70% | 1288 | $81.44 |
| 80% | 1472 | $71.26 |
| 90% | 1656 | $63.34 |
Check your current rate
Enter it to see what the same year pays you today, and how far the gap is.
Price a job at this rate
40 hours at $100 is $4,000, plus 15% for the parts nobody mentioned in the brief. Estimates run over far more often than they run under, and the contingency is what stops that costing you the margin rather than the client.
A floor, not a ceiling. It is the rate at which this year works out, which makes it the number to stop negotiating below rather than the number to open with. Everything stays in your browser.
This rate assumed a billable share. Do you know your real one?
It is the input with the most influence on the answer and the one almost everyone guesses. PomoTodo tracks focus sessions against the task and project they belong to, marks what is billable, and shows you the actual percentage at the end of the month. Come back, put your real number in, and see what your rate should have been all along.
Free plan tracks unlimited focus time across unlimited tasks. No card required.
Most freelancers set their first rate by halving a salary, or by asking someone in a Slack group what they charge. Both produce a number with no relationship to the year you are actually going to have, which is why the second year so often involves working more and earning less.
The arithmetic here runs the other way. Say what you need to take home. Add what it costs to be in business at all. Gross the take-home up for tax, because tax is charged on profit and nobody gets to skip it. Then divide by the hours you can genuinely sell, which is a much smaller number than the hours you will work.
What comes out is a floor. It is the rate below which this year does not add up, which makes it the number to stop negotiating at rather than the number to open with. Open higher.
The three numbers people get wrong
Billable hours. A full-time year is often quoted as 2080 hours. Take six weeks off and you are at 1840 before anyone has sent an email. Bill 60 percent of those and you have around 1100 hours to sell. Every rate calculation that starts from 2080 is understating the rate by nearly half, and that single mistake is responsible for more underpriced freelancers than any other.
Tax on profit, not on revenue. Business expenses come off before tax is worked out, so they should be added to the revenue target rather than grossed up alongside your take-home. Doing it the other way around taxes money that was never taxable and quietly inflates the rate. The calculator gets this order right.
Time off. Employees are paid for their holidays. You are not. Every week you take is a week with costs and no revenue, which means the other 46 have to carry it. Putting zero in that field is how people end up unable to afford to stop, then working through a fortnight in December to make the year work.
One more thing worth saying plainly: the rate this page produces is a break-even for the life you described, with no allowance for a bad quarter, a client who does not pay, or a year where you would like to save something. Add a margin on top of it. A rate that is exactly enough when everything goes right is not enough.
More tools
Hours and rates per client, invoice totals, utilization.
Send a quote with add-ons and a deposit, then invoice it.
Turn an hourly rate into annual, monthly, and weekly pay.
Build an invoice and download the PDF. Free, no signup.
Questions
How do I calculate my freelance hourly rate?
Work backwards from the year, not forwards from a number you heard. Start with the take-home pay you need, gross it up for tax, add what it costs to run the business, and divide by the hours you can actually bill. That last figure is the one people get wrong: it is not 2080. Take out the weeks you do not work, then take out the share of every week that goes on sales, admin and email. Someone billing 60 percent of a 46 week year has about 1104 billable hours, not 2080, which nearly doubles the rate they need.
Why is my freelance rate so much higher than a salary?
Because it is not the same thing. A salary comes with paid holiday, sick pay, an employer's share of payroll tax, a laptop, software, insurance and a pension. As a freelancer you buy all of that yourself out of the rate, and you only get paid for the hours a client agrees to pay for. Multiplying a salary by 1.0 and dividing by 2080 is how people end up earning less than the job they left. The usual honest multiple is somewhere between 1.5 and 2 times the equivalent salary rate.
What utilization rate should I assume?
Between 50 and 70 percent for most solo freelancers, and lower than you think in your first year. Everything that is not client work comes out of the same week: pitching, proposals, invoicing, chasing payment, bookkeeping, your own website, learning, and the gaps between projects. The table on this page shows what the assumption is worth. Moving from 70 percent to 50 percent raises the rate you need by about 40 percent, which is why measuring it matters more than most pricing advice.
What tax rate should I put in?
Use your effective rate on profit rather than your top bracket. A US sole trader paying self-employment tax plus federal and state income tax often lands between 25 and 35 percent of profit, but it depends on your state, your deductions, your filing status and whether you have taken an S-corp election. The number here only has to be close to make the rate useful, but ask your accountant for your real one before you set a rate you will hold for a year. Nothing on this page is tax advice.
Which business expenses should I include?
Everything you would not pay for if you were an employee. Software subscriptions, hardware amortised over its life, professional and liability insurance, an accountant, a coworking desk or the business share of your rent, your phone and internet, domain and hosting, courses, conferences, professional bodies, and bank or payment processing fees. Add a line for the ones that only appear once a year, because those are the ones that get forgotten and quietly come out of your take-home.
Should I charge by the hour or by the project?
Quote projects, price them with an hourly rate. Clients comparing quotes cannot tell whether forty hours is reasonable, but they can tell whether an outcome is worth the money, and hourly billing punishes you for getting faster at your job. Use the rate here privately to check a project is worth taking, add a contingency, and quote the total. Keep the hourly rate for change requests and open-ended work.
Is my data saved anywhere?
No. Everything you type stays in this browser's local storage so the figures are still there next time, and nothing is uploaded. Your income target and your expenses are nobody else's business.