Freelance Rate Calculator
Calculate the hourly rate needed to hit a target income as a freelancer.
About Freelance Rate Calculator
Freelance rates must cover tax, expenses and unpaid time, so the required rate is far above an equivalent salary divided by 2,080 hours. Utilisation above about 70 per cent is rarely sustainable because admin and sales are unbillable. Setting a rate by comparing to an employed salary understates it by roughly half, because employment includes paid leave, employer contributions and no unbillable time.
Formula
Freelance Rate
Rate = (target income ÷ (1 − tax rate) + expenses) ÷ annual billable hours
- billable utilisation
- Share of a working week that is chargeable, rarely above 70 per cent
- working weeks
- Excludes holiday and sick leave, which are unpaid when self-employed
Worked example
With the default values below, Freelance Rate Calculator returns Required Hourly Rate of $81.49. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Target take-home incomeminimum 0
- 60,000
- Annual business expensesminimum 0
- 8,000
- Effective tax and contributions rateaccepts 0–70 %
- 30 %
- Working weeks per yearaccepts 1–52 weeks
- 46 weeks
- Billable hours per weekaccepts 1–80 h
- 25 h
Results
- Required Hourly Rate
- $81.49
- Equivalent Day Rate
- $611.18
- Required Gross Revenue
- $93,714.29
- Annual Billable Hours
- 1,150 h
- Billable Utilisation
- 62.50%
Step by step
- 1Values used
- 2Freelance Rate
- 3Required Hourly Rate= 81.49
- 4Equivalent Day Rate= 611.18
- 5Required Gross Revenue= 93,714.29
- 6Annual Billable Hours= 1,150 h
- 7Billable Utilisation= 62.50
Assumptions and limits
- The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Freelance Rate calculated?
Rate = (target income ÷ (1 − tax rate) + expenses) ÷ annual billable hours Freelance rates must cover tax, expenses and unpaid time, so the required rate is far above an equivalent salary divided by 2,080 hours. Utilisation above about 70 per cent is rarely sustainable because admin and sales are unbillable.
Why does Freelance Rate matter?
Setting a rate by comparing to an employed salary understates it by roughly half, because employment includes paid leave, employer contributions and no unbillable time.
What values do I need to enter?
This calculator takes 5 inputs: Target take-home income, Annual business expenses, Effective tax and contributions rate, Working weeks per year, Billable hours per week. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.