Freelance Hourly Rate Calculator

How Freelance Hourly Rate Calculator Works

This calculator works backward from the annual income you want to take home to the hourly rate you need to charge clients, accounting for business expenses, how many hours and weeks you actually work, and the chunk of your time that isn't billable to any client.

Formula & Method

First it finds your total working hours (hours per week × weeks per year) and your billable hours (total working hours × (1 − non-billable % ÷ 100)), since admin, marketing, and other unbillable work still eats into your available time. Total revenue needed is desired income + annual business expenses. The hourly rate to charge is then total revenue needed ÷ billable hours. From there, billable hours per week (hours per week × (1 − non-billable % ÷ 100)) is used to derive a weekly income target (hourly rate × billable hours per week) and a daily rate assuming a 5-day week (weekly target ÷ 5).

Worked Example

With a desired take-home income of $60,000, annual expenses of $6,000, working 40 hours a week for 48 weeks a year, and 20% non-billable time: total working hours are 40 × 48 = 1,920, and billable hours are 1,920 × 0.8 = 1,536. Total revenue needed is $60,000 + $6,000 = $66,000, so the hourly rate to charge is $66,000 ÷ 1,536 = $42.97. Billable hours per week are 40 × 0.8 = 32, giving a weekly income target of $42.97 × 32 = $1,375.00 and a daily rate (over a 5-day week) of $275.00.

Frequently Asked Questions

Why is the hourly rate higher than desired income divided by total hours?

Because two adjustments push it up: business expenses are added on top of your take-home target (since clients aren't paying your expenses separately), and non-billable hours are excluded from the denominator, so the rate is spread across fewer hours than you actually work.

What should I count as non-billable time?

Any work you do that you can't invoice a specific client for -- admin and bookkeeping, marketing and outreach, proposals and quotes, unpaid discovery calls, and professional development all count. Most freelancers find this is 15-30% of their total working time, sometimes more when starting out.

Should I include taxes in my desired income or expenses?

This calculator doesn't separate out tax automatically, so if you want your rate to also cover self-employment tax and income tax, add an estimate of those into either the desired income or annual expenses field -- otherwise the "desired income" figure represents your true take-home pay before tax.

Why does increasing weeks off raise my hourly rate?

Fewer working weeks per year means fewer total billable hours to spread your annual income and expenses across, so each hour needs to earn more to hit the same yearly target.