Freelance Rate Calculator

The number that trips almost everyone up is billable hours. Dividing a target salary by 2,080 hours assumes every working hour is invoiced, but most full-time freelancers bill 20–30 hours a week: the rest disappears into quoting, admin, invoicing, marketing, learning and unpaid revisions. Assuming 40 billable hours understates the rate you need by roughly a third, which is exactly how people end up working constantly and still falling short. The second omission is that employees are paid for holiday and sick days while freelancers are not, so weeks off reduce your billable year without reducing your income target — which is why the same take-home figure requires a noticeably higher hourly rate than an equivalent salary suggests.

Revenue needed = target income ÷ (1 − tax rate) + expenses. Billable hours per year = (52 − weeks off) × billable hours per week. The minimum rate is revenue needed ÷ billable hours per year.

This produces a floor, not a price — it covers your costs and target income but includes nothing for profit, equipment replacement, pension contributions or slow months. It uses a single effective tax rate rather than modelling progressive bands, national insurance or corporation tax, which vary by country and business structure. It also assumes you fill every billable hour you plan for, which is optimistic in a first year.

To take home 60,000 with 8,000 of expenses at a 28% effective tax rate, billing 25 hours a week with 6 weeks off, you need 91,333 of revenue across 1,150 billable hours — about 79.42 an hour.

1. Enter the take-home income you want for the year.
2. Add your annual business expenses and effective tax rate.
3. Enter realistic billable hours per week and weeks off.
4. Charge above the resulting floor, not at it.

• Assuming 40 billable hours a week instead of a realistic 20–30.
• Dividing a salary by 2,080 hours and calling that a freelance rate.
• Forgetting that holiday and sick days are unpaid when self-employed.
• Charging exactly this floor, which leaves nothing for profit or quiet months.

The Freelance Rate Calculator works backwards from the income you actually want to keep. It grosses up for tax, adds your business expenses, divides by the hours you can genuinely bill, and shows the minimum hourly rate that reaches your target — plus what happens if you bill fewer hours than planned.

Freelancers and contractors setting rates, and employees weighing up going independent.

• Works backwards from take-home pay, not from a salary figure.
• Accounts for the unpaid weeks employees get as holiday.
• Shows how sensitive your rate is to billable hours.
• Breaks down where every pound of revenue actually goes.

• Setting an hourly or day rate for the first time.
• Checking whether an existing rate covers your costs.
• Comparing a freelance rate against a salaried offer.
• Working out what a rate rise needs to be to hit a new income goal.