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Freelance Rate Calculator

What hourly rate do you actually need to charge to earn the income you want — after expenses, time off, and the hours you cannot bill for?

Calculate your rate

Annual salary target ($) The income you want to take home in a year, before business expenses. Start with what you would earn in a full-time job doing the same work. Annual business expenses ($) Software, equipment, insurance, accounting, marketing, coworking — everything the business pays for before you get paid. Billable hours per week Hours you can actually charge a client for. Most freelancers bill 20–30 hours a week; the rest goes to admin, sales, and learning. Weeks worked per year 52 minus vacation, sick days, and holidays. Four weeks off means 48 working weeks. Profit margin (%) A buffer for slow months, price increases, and growth. 10–20% is a reasonable starting point; 0% means you earn exactly your target and nothing more.

Calculate my rate

Enter your numbers and press Calculate. Your rate will appear here.

Why most freelancers undercharge

The most common pricing mistake is also the simplest: dividing a salary by 2,080. That is 40 hours a week times 52 weeks, and it is the math of a full-time employee. A freelancer is not an employee. You do not get paid for the hours you spend finding clients, writing proposals, doing your own bookkeeping, fixing your laptop, or taking a vacation. If you bill 25 hours a week for 48 weeks, you bill 1,200 hours a year — not 2,080. Divide the same salary by 1,200 instead of 2,080 and the rate jumps by more than 70 percent. That is not greed. That is the same income spread over fewer paid hours.

Then there are the costs an employer normally hides. Health insurance, retirement contributions, paid time off, software licenses, and self-employment tax all come out of your rate now. Add business expenses on top — the tools, the accountant, the website — and the gap between an employee’s salary and a freelancer’s rate grows wider still. This calculator makes those costs visible instead of letting them eat your income quietly.

The profit margin is the part people skip most often, and it is the part that keeps a freelance business alive. A margin is not a bonus. It is the money that covers a slow month, a client who pays late, a price increase in your software, or a week when you are sick and cannot bill. Without it, every surprise comes straight out of your salary. With a 10 to 20 percent margin, the business can absorb a bad month without you working nights to catch up.

Worked example

Suppose you want to earn $60,000 a year, your business expenses are $6,000 a year, you can bill 25 hours a week, you work 48 weeks a year, and you want a 20 percent profit margin.

1. Income you need to cover: $60,000 + $6,000 = $66,000.
2. Billable hours per year: 25 × 48 = 1,200 hours.
3. Base rate: $66,000 ÷ 1,200 = $55.00 per hour.
4. Add the margin: $55.00 × 1.20 = $66.00 per hour.

At $66 an hour, a full eight-hour day is $528, a 25-hour week is $1,650, and the monthly equivalent is about $7,150. If that number feels high compared with what you charge now, that feeling is exactly what the calculator is for: the gap between your current rate and this number is the gap between your income goal and your reality. Close it by raising your rate, billing more hours, cutting expenses, or some combination of the three — but do not close it by pretending the hours and costs do not exist.

How to use your result

Use the hourly rate as your floor, not your ceiling. Quote project prices from it — a project you expect to take 10 hours should cost at least $660 at the example rate — but charge more when the work is urgent, specialized, or high-value to the client. A rate is a starting point for a negotiation, not a number carved in stone. If every client accepts your first quote without a pause, your rate is probably too low. If every client walks away, the rate may be ahead of your market, your portfolio, or your niche — or you may be talking to the wrong clients. Read the full guide, How Much Should I Charge? A Freelancer’s Guide to Setting Your Rate, for how to raise your rate with existing clients and how to test a higher price without losing your pipeline.

Revisit the calculator at least twice a year, and every time something big changes: your expenses go up, you take more time off, your tax situation changes, or your skills grow. A rate set two years ago is a rate set for a different business.

Frequently asked questions

Should I charge by the hour or by the project?

Hourly pricing is simpler and protects you when a project grows. Project pricing usually earns more once you are fast, because the client pays for the result, not your time. Many freelancers use an hourly rate internally to price a project, then quote the project as a fixed fee. Either way, you need to know your hourly floor first.

What if my calculated rate is much higher than what others charge?

First, check your inputs — especially billable hours. If you assumed 15 billable hours a week, the rate will be high, and the fix may be finding more work, not cutting your price. Second, compare like with like: a specialist with ten years of experience should charge more than a generalist in year one. Third, remember that the cheapest freelancer is not the one clients remember. Competing on price alone is a race to the bottom.

Does this calculator include taxes?

No. The salary target you enter should be the income you want before income tax, and the calculator does not subtract tax from the result. Freelancers in the US also pay self-employment tax. Use the take-home pay calculator to see what an invoice leaves after tax, and talk to a tax professional about quarterly estimated payments.

How often should I raise my rate?

Most experienced freelancers review their rate at least once a year and raise it for new clients when demand, skills, or costs rise. Existing clients usually accept a small, well-explained increase once a year far better than a large surprise increase every three years.

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