Freelance hourly rate calculator

Work out the hourly rate a freelancer or contractor needs to reach a target income after expenses and set-asides.

In shortRate = (target income + expenses) ÷ (1 − set-aside %) ÷ billable hours per year. $70,000 income, $9,000 expenses, 25% set aside and 1,150 billable hours gives about $91.59 an hour.

Who uses itFreelancers, consultants and solo contractors
WhenStarting out or reviewing rates each year
You needTarget income, expenses, set-aside, billable hours
ResultThe lowest hourly rate that meets your target

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The freelance hourly rate formula

Revenue needed = (income + expenses) ÷ (1 − set-aside %).

Billable hours = billable hours per week × weeks worked.

Rate = revenue needed ÷ billable hours.

Walking through a freelance hourly rate example

A freelance designer wants $70,000 a year, has $9,000 in expenses and sets aside 25%. Revenue needed is about $105,333. With 25 billable hours a week for 46 weeks (1,150 hours), the minimum rate is about $91.59.

Who uses this calculator

Freelancers often set rates by comparing with an employee’s hourly wage and end up short. They pay their own expenses, have unpaid admin time and set money aside for taxes.

The set-aside percentage is your own estimate. Ask a tax professional what is right for you.

Another freelance hourly rate example

A freelance bookkeeper wants $55,000 a year, expects $6,200 in software, insurance and continuing education, and sets aside 30% for taxes and retirement. Revenue needed is about $87,429. She bills 20 hours a week for 48 weeks, 960 billable hours, so her minimum rate is $91.07 an hour.

Reading the result

The minimum rate works only if you actually bill every planned hour, so a slow month means the rate was too low for the year. Billable hours should leave out admin, marketing and unpaid revisions. The set-aside is one blended percentage; your real tax depends on income, deductions and location, so treat it as a planning figure.

Where a freelance hourly rate goes wrong

Planning for 52 working weeks. Take out vacation, holidays, sick days and slow weeks before you count billable hours.
Forgetting costs an employer used to pay, such as health insurance and retirement savings. Add them to expenses.
Quoting the same rate for rush jobs and weekend work. Decide a rush rate before the first urgent request arrives.

The freelance hourly rate by team type

Designers and writersTurn the hourly floor into project prices using hours from past similar jobs, plus a revision buffer.

IT and trades contractorsAdd a minimum call-out charge so short visits still cover travel and setup.

Quick winRaise rates for new clients first and for existing clients at a set yearly date. It gives regular clients notice and keeps relationships steady.

What people ask about the freelance hourly rate calculator

Why not 40 billable hours?

Admin, sales and unpaid time take a share of the week.

What set-aside should I use?

Ask a tax professional; it depends on your situation.

Is this the rate I should charge?

It is a floor; the market sets the ceiling.

Should I track my hours?

Yes, to check billable hours against the plan.

How do I turn the minimum rate into a project price?

Estimate the hours the project will take, including calls, revisions and admin, and multiply by the minimum rate. Add a buffer for scope changes, since a fixed price moves the risk of extra hours onto you.

Why does the set-aside raise revenue needed by more than its percentage?

The set-aside comes out of revenue, so revenue needed is income plus expenses divided by one minus the set-aside. At 30%, every $1 of income and expenses needs about $1.43 of revenue, not $1.30.

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An estimate for planning only. It is not tax, legal or financial advice. Check your situation with a qualified professional.