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No. 08Pricing & Pay

Freelance Rate Calculator

Work out the minimum hourly and day rate you need to charge as a freelancer or consultant to hit your income goal after taxes, expenses and unbillable time.

What you want to keep after taxes and business costs.

Software, equipment, insurance, health cover, accounting, etc.

Your estimate of total income + self-employment tax on profit.

After vacation, holidays, sick days.

Time spent on client work vs. sales, admin and invoicing.

Results

Minimum hourly rate

$99.64

$797.10 per 8-hour billable day

Where the revenue goes

  • Take-home
  • Taxes
  • Expenses
Revenue needed
$110,000
Tax set-aside
$25,000
Billable hours per yearHours you can charge a client for
1,104

This is a floor, not a market rate. Compare it with what clients pay for your skills, and charge the higher of the two.

Show the calculation
  1. Pre-tax profit$75,000 ÷ (1 − 25%)= $100,000
  2. Revenue needed$100,000 + $10,000= $110,000
  3. Billable hours46 × 40 × 60%= 1,104
  4. Hourly rate$110,000 ÷ 1,104= $99.64

Required hourly rate: billable share vs. working weeks

Billable time is usually the biggest lever. See how the rate you need changes.

Required hourly rate: billable share vs. working weeks: rows are Billable %, columns are Weeks
Billable % ↓ · Weeks →42 wks44 wks46 wks48 wks50 wks
40%$163.69$156.25$149.46$143.23$137.50
50%$130.95$125.00$119.57$114.58$110.00
60%$109.13$104.17$99.64$95.49$91.67
70%$93.54$89.29$85.40$81.85$78.57
80%$81.85$78.13$74.73$71.61$68.75

How it’s calculated

Pre-tax Profit
equals Target Take-home ÷ (1 − Tax Rate)
Revenue Needed
equals Pre-tax Profit + Business Expenses
Billable Hours
equals Working Weeks × Hours per Week × Billable %
Hourly Rate
equals Revenue Needed ÷ Billable Hours

Worked example

A freelance designer wants to take home $90,000 a year. They expect $14,000 in business expenses and set aside 28% of profit for taxes. They plan 45 working weeks of 40 hours, with about 65% of that time billable.

  1. Pre-tax profit = $90,000 ÷ 0.72 = $125,000.00
  2. Revenue needed = $125,000.00 + $14,000 = $139,000.00
  3. Billable hours = 45 × 40 × 0.65 = 1,170
  4. Hourly rate = $139,000.00 ÷ 1,170 = $118.80

Dividing $90,000 by 2,080 hours would suggest about $43 an hour — less than half the $118.80 actually needed.

From hourly rate to project price

Many freelancers quote fixed project fees rather than hours. Estimate the hours a project will take, add a buffer for revisions and communication (often 15–25%), and multiply by your rate. Our guide on setting your freelance rate walks through the full method.

Assumptions and limitations

  • The tax set-aside rate is your own estimate of combined income and self-employment taxes as a share of profit. This tool doesn’t calculate tax liability; confirm your rate with a tax professional.
  • Include health insurance, retirement contributions you fund yourself, software, equipment, insurance, accounting and marketing in expenses.
  • Billable share is usually well below 100%: sales, proposals, invoicing, admin and learning all take time. 50–70% is common for independent professionals, but track your own.
  • The result is a minimum to meet your goals, not a market rate. Clients pay for value and expertise; check what comparable professionals charge.

Results are estimates for information only and are not financial, tax or legal advice. See our disclaimer.