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
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
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Revenue needed = (take-home + costs) ÷ (1 − tax rate). Billable hours = weeks × hours × billable share. Rate = revenue ÷ billable hours.
Admin, sales, invoicing and learning take time you cannot bill.
Use your own effective rate; ask a local accountant.
Pay yourself a fixed monthly salary from a buffer; our freelancer budget sheet does that maths.