Freelance planning
Freelance Rate Calculator
Use this freelance rate calculator to turn your take-home income goal, expenses, taxes, and billable hours into a practical hourly rate.
Formula
- Pre-tax income needed = Desired take-home income / (1 - Tax rate)
- Revenue needed = Pre-tax income needed + Business expenses
- Buffered revenue needed = Revenue needed * (1 + Buffer rate)
- Billable hours per year = Weeks worked * Billable hours per week
- Hourly rate = Buffered revenue needed / Billable hours per year
Examples
- A freelancer who wants $80,000 take-home income, has $12,000 in expenses, and bills 1,150 hours may need around $113 per hour with a 10% buffer.
- Reducing billable hours from 25 to 20 per week raises the required rate even if your income goal stays the same.
- A 20-hour project should be priced from the required hourly rate, not only from the time spent doing visible client work.
When to use this calculator
- Set a minimum hourly rate before quoting work.
- Convert an annual income goal into monthly and project targets.
- Test how vacation, admin time, and non-billable work affect pricing.
Common mistakes
- Dividing income goal by 2,080 hours even though not all hours are billable.
- Forgetting software, insurance, contractors, and other business expenses.
- Ignoring tax estimates when setting a rate.
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Sources and assumptions
This calculator uses the formula and assumptions shown on this page.
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Taxes vary by country, state, business type, and personal situation. Use this as a planning estimate only.