Work hours & pay
Freelance rate calculator
Enter the take-home income you want, your yearly business costs, weeks off, billable hours and tax set-aside to get the lowest hourly and day rate that covers them.
Billable hours are the hours you can invoice, not the hours you work. The tax set-aside is applied to profit (revenue minus costs).
How the minimum freelance rate is calculated
Start from the money you want to keep. Profit before tax must be take-home income ÷ (1 − tax rate), because the set-aside is a share of profit. Add business costs to get the revenue you need. Divide that by billable hours a year, which is billable hours per week × (52 − weeks off). The result is the lowest hourly rate that meets the target; the day rate is that × 8.
Worked example with the defaults: to keep $70,000 with 30% set aside for tax, profit must be 70,000 ÷ 0.7 = $100,000, of which $30,000 goes to tax. Adding $8,000 of costs gives $108,000 of revenue. Six weeks off leaves 46 working weeks; at 25 billable hours that is 1,150 hours. The minimum rate is 108,000 ÷ 1,150 = $93.91 an hour, or about $751 for an 8-hour day.
| Billable hours per week | Billable hours per year | Minimum hourly rate | Day rate (8 h) |
|---|---|---|---|
| 15 | 690 | $156.52 | $1,252 |
| 20 | 920 | $117.39 | $939 |
| 25 | 1,150 | $93.91 | $751 |
| 30 | 1,380 | $78.26 | $626 |
| 35 | 1,610 | $67.08 | $537 |
Every row uses the default target: $108,000 of revenue over 46 working weeks.
Setting a rate you can live on
The most common mistake is dividing a salary by 2,080 hours. A freelancer pays for their own equipment, software, insurance and pension, has no paid leave, and cannot bill the hours spent on proposals, invoicing and learning. Be honest about billable hours: 20 to 30 a week is a typical range for a full-time solo business, and a quiet month lowers the yearly average.
Choose the tax set-aside from your real situation. In the United States, self-employed people pay self-employment tax of 15.3% for Social Security and Medicare on top of income tax, so a combined set-aside of 25–35% of profit is common; elsewhere the mix of income tax and social contributions differs. When in doubt, set aside more and treat any surplus as a buffer.
The figure here is a floor, not a price. Charge more when the work is specialised, urgent or high-value for the client, and build in a margin for late payers and unpaid gaps between projects. If the market will not pay the floor, change the inputs: fewer weeks off, lower costs or more billable hours.
Frequently asked questions
How do I calculate my freelance hourly rate?
Add the take-home income you want, grossed up for tax, to your yearly business costs, then divide by the hours you can actually bill in a year after time off.
How many billable hours does a freelancer have per year?
Often 1,000 to 1,400. At 25 billable hours a week and 46 working weeks it is 1,150 hours, far below the 2,080 hours of a salaried full-time job.
How do I turn my hourly rate into a day rate?
Multiply the hourly rate by the billable hours in your day, usually 8 or 7.5. At $93.91 an hour an 8-hour day rate is about $751; many freelancers round it up.