Freelance Hourly Rate Calculator
This free freelance hourly rate calculator works backward from your target annual income to the hourly rate you need to charge. Enter your billable hours, yearly business expenses, and effective tax rate, and it calculates the rate that covers everything — with the revenue breakdown updating instantly as you type.
Enter your numbers
Your results
| Revenue you must bill | $80,000.00 |
|---|---|
| Business expenses | $0.00 |
| Estimated taxes | $0.00 |
| Take-home income (your goal) | $80,000.00 |
Estimates are for planning only. The tax figure is a rough estimate: real tax liability depends on your filing status, deductions, and jurisdiction — not professional tax advice.
How to use this calculator
Start with your target annual income — what you want to take home after expenses and taxes, not what you want to bill. Then enter how many billable hours per week you realistically expect and how many weeks per year you will work, accounting for holidays, sick days, and gaps between clients.
Add your yearly business expenses — software, equipment, insurance, accounting, health insurance, marketing — and your effective tax rate as a percentage. Everything updates instantly as you type, so you can see how each input moves your rate.
Try scenarios: drop your billable hours to 20 per week and watch the rate climb, or raise your tax rate to see the gross-up effect. The revenue breakdown below the rate shows exactly where your billed dollars go.
How it works
The core math is simple: hourly rate = (target income + business expenses) ÷ billable hours, where billable hours = hours per week × weeks per year. For example, $80,000 ÷ (25 hours × 40 weeks = 1,000 hours) = $80 per hour. This is the rate that covers your income goal and expenses if you paid no tax.
Taxes are handled with a tax gross-up: the pre-tax total is divided by (1 − tax rate), so the rate becomes (income + expenses) ÷ hours ÷ (1 − tax rate). At a 25% tax rate, you divide by 0.75, which adds roughly 33% to your rate. This is an estimate — it assumes a flat effective rate applied to your billed revenue, while real taxes depend on deductions, filing status, and local rules.
Billable vs. non-billable hours: billable hours are hours you charge a client for. Pitching, admin, marketing, invoicing, and training are non-billable and must be absorbed by your rate — which is why freelancers usually plan on far fewer billable hours than a 40-hour week. A common planning range is 800 to 1,200 billable hours per year.
Assumptions: your expenses are fully recovered through billing, taxes are a flat percentage of billed revenue (an estimate), and you collect every hour you bill. Results are planning estimates, not a guaranteed income or professional financial advice.
Frequently asked questions
How do I calculate my freelance hourly rate?
Divide your total yearly costs by your billable hours, then gross up for taxes. The formula is: hourly rate = (target income + business expenses) ÷ billable hours ÷ (1 − tax rate). For example, an $80,000 target income over 1,000 billable hours is $80,000 ÷ 1,000 = $80 per hour before tax; at a 25% tax rate you would charge $80 ÷ (1 − 0.25) = $106.67 per hour so that your after-tax take-home still hits $80,000.
How many billable hours should I use?
Use only the hours you can actually charge a client for — not your total work week. A common planning range is 20 to 25 billable hours per week for 40 to 48 weeks a year, which works out to roughly 800 to 1,200 billable hours annually. The rest of your time goes to non-billable work like pitching clients, admin, marketing, invoicing, and learning new skills. This calculator multiplies your billable hours per week by your weeks worked per year to get the annual total.
Should my freelance rate include taxes?
Yes — your billed rate should be high enough that what is left after tax still covers your income goal and expenses. This calculator applies a tax gross-up: it divides (target income + expenses) by (1 − tax rate) to estimate the pre-tax revenue you must bill. With a 25% effective tax rate, for example, you need to bill about 33% more than your after-tax target. The tax figure is an estimate, since real tax liability depends on your filing status, deductions, and jurisdiction.
What business expenses should I include?
Include everything you pay to run your freelance work: software subscriptions, computer and equipment, internet and phone, coworking or home-office costs, professional insurance, accounting or tax-preparation fees, health insurance premiums, marketing and advertising, travel to clients, and training or certifications. A rough starting figure is 10% to 20% of your target income if you are unsure. Undercounting expenses is the most common reason freelancers set rates too low.
Why is my freelance rate so much higher than my old salary?
An $80,000 salary looks like about $38 per hour, but the comparison is misleading. Your employer paid payroll taxes, retirement contributions, health insurance, and paid time off on top of that salary — costs you now pay yourself. You also bill far fewer hours than a 40-hour work week because client work is only part of your week, and you have no paid holidays. Together, higher costs and fewer billable hours are why a sound freelance rate is typically 1.5 to 2.5 times the equivalent employee hourly wage.