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Freelance Hourly Rate Calculator

Work backwards from the income you want to the hourly rate you need, after business costs, tax and unbillable time.

By TanLabs · Formulas cross-checked against the free spreadsheet · Updated 2026-10-31 · Runs in your browser – nothing you type is sent anywhere

Desired yearly take-home$Yearly business costs$Tax set-aside%Working weeks per yearHours per weekBillable share%

📥 Download the free Excel / Google Sheets version (same formulas, no sign-up).
Want the full system? Freelancer Irregular-Income Budget (Excel + Google Sheets) – $12

How to use this calculator

Enter the yearly take-home income you want, like a salary.
Add yearly business costs: software, equipment, insurance, accountant, coworking and health insurance if you pay it yourself.
Enter a tax set-aside and your working weeks after holidays and sick days.
Enter hours per week and the share of them you can actually bill. Read the minimum hourly and day rate.

Worked example

With desired yearly take-home $60,000, yearly business costs $6,000, tax set-aside 25%, working weeks per year 46, hours per week 40, billable share 60%:

Charge at least $80/hour
Gross revenue needed $88,000 over 1104 billable hours · Day rate (8h) $638

Change any number above – the result, chart and table update instantly. Use Copy link to save or share your exact scenario.

How it's calculated

Revenue needed = (take-home + costs) ÷ (1 − tax rate). Billable hours = weeks × hours × billable share. Rate = revenue ÷ billable hours.

How billable time changes the rate

Business costs $6,000, tax set-aside 25%, 46 weeks × 40 hours:

Take-home goal	50% billable	60% billable	75% billable
$40,000	$67/h	$56/h	$44/h
$60,000	$96/h	$80/h	$64/h
$90,000	$139/h	$116/h	$93/h

Billable share moves the rate more than almost anything else. New freelancers often bill only half their time because finding clients takes so long.

Common mistakes

Copying your old salary per hour. An employer pays for holidays, equipment and half the payroll tax; you now pay all of them.
Assuming 100% billable time. Sales, admin and invoicing usually take 25–50% of the week.
Forgetting self-employment tax. In the US, self-employed people pay both halves of Social Security and Medicare on top of income tax.
Never raising rates. Re-run the numbers each year and raise rates for new clients first.

FAQ

Why only 60% billable?

Admin, sales, invoicing and learning take time you cannot bill.

Is the tax rate right?

Use your own effective rate; ask a local accountant.

Income is irregular – now what?

Pay yourself a fixed monthly salary from a buffer; our freelancer budget sheet does that maths.

Should I charge hourly or per project?

Many freelancers estimate the hours, multiply by this rate and quote a project price. That way you earn more when you work faster.

What tax rate should I use?

Your effective rate including self-employment tax. Many US freelancers set aside 25–30%; your accountant can give a better number.

Is the day rate just 8 × the hourly rate?

It is a starting point. Some freelancers give a small discount for full days or weeks of booked work.

Sources: IRS – Self-employment tax

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