Freelance Rate Calculator

An employee's 2,080 hours are all paid, and the employer covers payroll taxes, benefits, equipment, time off and admin. As a freelancer you pay all of that yourself and only some of your hours are billable, so your rate has to be much higher than salary divided by 2,080 to end up with the same take-home pay.

Working hours are everything you spend on the business. Billable hours are only the ones a client pays for. Sales, proposals, invoicing, email, learning and breaks are not billable, so most freelancers bill far fewer than 40 hours a week even when they work full time.

Be conservative. Many full-time freelancers bill somewhere between 20 and 30 hours a week once admin and downtime are removed. Using 40 will make your rate look low and leave you working unpaid hours to hit your income goal.

Expenses are added to your target income because revenue has to cover both. The total is then grossed up by your tax rate using income divided by one minus the tax rate, so the rate you see is the gross amount to bill before tax is taken out.

Treat it as a floor, not a ceiling. It is the rate that hits your income target if everything goes to plan. Many freelancers add a margin on top for profit, slow periods and the value they deliver, then round to a clean number.

Review your rate at least once a year and whenever your skills, demand or costs rise. Re-run the calculator with updated income goals and expenses, and raise new-client rates first if increasing existing clients feels risky.