Freelance Hourly Rate Calculator
A simplified rate calculator for freelancers who think in terms of desired income, expenses and time off — not a full business P&L.
| Project size | Price at recommended rate |
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How it works
Formulas used
Working weeks = 52 − vacation weeks Billable hours = Working weeks × Hours/week × Utilization Break-even rate = (Income + Expenses) / Billable hours Recommended revenue = (Income + Expenses) / (1 − Reserve% − Margin%) Recommended rate = Recommended revenue / Billable hours
Worked example
$70,000 desired income, $8,000 expenses, 4 weeks off, 40 hrs/week, 65% utilization, 10% reserve, 10% margin:
- Working weeks: 52 − 4 = 48
- Billable hours: 48 × 40 × 0.65 = 1,248 hours
- Naive rate: $70,000 ÷ 2,080 ≈ $33.65/hour
- Recommended rate: ($78,000 ÷ 0.80) ÷ 1,248 ≈ $78.13/hour — more than double the naive figure.
Limitations
This estimates a sustainable internal rate, not a market rate. It is a planning estimate, not tax advice.
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Frequently asked questions
Why is my recommended rate so much higher than salary ÷ 2,080?
Because that naive math assumes 100% billable time and zero business costs — neither is true for freelancers.
Should I charge exactly this rate?
Treat it as your internal floor. Market demand, experience and niche positioning may support charging more.
Use your freelance rate as a floor, not a script
The calculated rate is the average you need across paid work. Some projects can support a higher rate and others may justify a deliberate discount, but the weighted average still needs to cover unpaid time, expenses and your income target.
Apply it to real work
- Estimate the total hours for discovery, revisions, communication and delivery before quoting.
- Set a minimum engagement so very small jobs do not consume unpaid coordination time.
- Track the effective hourly rate after each project and compare it with this target.
Common sources of underpricing
- Leaving vacation, sick days and business development out of available working time.
- Counting every working hour as billable when clients only pay for delivery time.
- Absorbing payment fees, subcontractors or software without adding them to project cost.