About the Freelance Hourly Rate Calculator
Freelancers often set their rate by looking at what an employee earns per hour, then wonder why they struggle. The reason is that employees are paid for every working hour, while freelancers are paid only for billable hours, and must cover their own taxes, equipment, software, insurance and time off. This calculator starts from the income you want to take home, adds your business costs, grosses it up for tax and contributions and divides by the hours you can realistically bill in a year. It shows the hourly rate and the day rate you need to charge to hit the target.
Updated October 2026
How to use the Freelance Hourly Rate Calculator
- 1Enter the yearly income you want to keep after tax and costs.
- 2Enter your business costs for the year.
- 3Enter an estimated tax and contributions rate.
- 4Enter billable hours per week and weeks off per year.
- 5Read the hourly and daily rate, and the revenue needed.
Worked example
Someone wants to take home 60,000. Business costs are 6,000 and tax is 25 percent. The revenue needed is 60,000 ÷ 0.75 + 6,000 = 86,000. Billing 25 hours a week for 47 weeks gives 1,175 billable hours. The hourly rate is 86,000 ÷ 1,175 = 73.19, and a day of 6 billable hours is 439. A rate of 50 would leave them about 27,000 short of their target.
Think about the mix of clients as well. A retainer or a regular monthly contract smooths your income and cuts the time you spend looking for work, so you can charge a little less per hour for it. One-off rush jobs deserve a premium. Many freelancers keep a list of three rates: a standard rate, a lower rate for steady work and a higher rate for urgent or specialised work, all checked against the minimum this calculator shows.
Costs to remember
- Software, equipment and a place to work.
- Professional insurance.
- Accountancy and legal fees.
- Marketing and training.
- Pension and health cover you pay yourself.
Raising your rate
Review your rates at least once a year and raise them when demand is strong. A rise of 10 percent for new clients is common. Many freelancers worry about losing clients, but those who stay are often happy to pay more for reliable work. Track your actual billable hours to see whether your assumptions match reality.
Related tools
The Salary Calculator converts pay between periods, the Invoice Generator creates bills for your clients, the Profit Margin Calculator checks project profits and the Budget Calculator helps you plan monthly finances.
Features
- Rate from target income
- Business costs and taxes included
- Billable hours, not working hours
- Weeks off built in
- Daily rate for fixed-day work
- Any currency
Frequently asked questions
How do I calculate my freelance rate?
Add the income you want to keep and your business costs, adjust for tax, then divide by the hours you can bill. For 60,000 take-home, 6,000 costs, 25 percent tax and 1,175 billable hours, the rate is about 73.19 an hour.
What are billable hours?
The hours you can charge a client for. Time spent finding work, invoicing, learning and administration is not billable, so most freelancers bill only 20 to 30 hours in a 40-hour week.
How much should I allow for tax?
It depends on your country and income. Many freelancers set aside 25 to 35 percent of profit for income tax and social contributions. Ask an accountant for your own figure.
Why is the rate higher than an employee's hourly pay?
You pay for your own holidays, sickness, pension, equipment and unbillable time. A common rule of thumb is that a freelance rate needs to be about 1.5 to 2 times the hourly equivalent of an employee salary.
Should I charge by the hour or by the project?
Project or value-based pricing can reward efficiency and give clients certainty. Use the hourly rate as a floor to check that a fixed price is worth your time.
What if the clients won't pay that much?
You can raise your income by cutting costs, billing more hours, adding higher-value services or targeting better-paying clients. Lowering the rate below what you need only works if you fill the gap some other way.