Freelance Rate Calculator

What this tool does

The Freelance Rate Calculator computes the minimum hourly rate you need to hit your income goal. It starts from desired annual income, adds business expenses and a tax buffer, then divides by your realistic billable hours.

New freelancers routinely underprice by charging what an employer paid per hour, forgetting that freelancers pay their own taxes, cover their own tools, and only bill a fraction of their working hours. This calculator makes those hidden costs explicit.

The formula is shown transparently so you understand exactly where the number comes from — and can defend it to a client.

How to use it

1. Enter your desired annual income.
2. Add annual business expenses and a tax buffer percentage.
3. Enter billable hours per week and working weeks per year.
4. Read your minimum hourly rate and the annual billable hours behind it.

How it works

• Total needed = desired income + business expenses + (desired income × tax buffer).
• Annual billable hours = billable hours per week × working weeks per year.
• Hourly rate = total needed ÷ annual billable hours.
• Billable hours are usually far below total working hours — most freelancers bill 20–30 hours per week.

Example

Desired income $80,000, expenses $5,000, 25% tax buffer, 25 billable hours/week, 46 weeks → $105,000 needed ÷ 1,150 hours = $91.30/hour.

Common questions