Freelance rate calculator

This freelance rate calculator works out the hourly and daily rate you need to charge to reach your target net income, once you account for expenses, self-employment dues, estimated tax and the hours you can actually bill.

How to calculate your freelance rate

The most common pricing mistake is dividing your desired salary by the hours in a year. Your real rate has to cover far more than take-home pay: business expenses, self-employment dues, tax, and the fact that not every hour you work is billable.

The method

Start from the net income you want to take home and add tax to get the pre-tax profit you need.
Add expenses and self-employment dues: that’s your target annual revenue.
Work out your billable hours per year (work days minus vacation and holidays, times the hours you actually bill per day).
Divide the target revenue by those hours: that’s your rate.

For guidance only — tax is modeled as a flat percentage of profit (in reality it’s usually progressive), sales tax/VAT isn’t included, and this isn’t tax or financial advice.

FAQ

Why can't I just divide my desired salary by the hours in a year?

Because as a freelancer you don't bill every hour: there's vacation, holidays, admin, client outreach and training. On top of that, what you invoice still has to cover your expenses, self-employment dues and tax. Your rate needs to cover all of that, not just your take-home pay.

What counts as "billable hours"?

The hours you can actually charge a client for. An 8-hour day is rarely 8 billable hours — once you factor in admin, proposals, email and breaks, 5-6 billable hours a day is typical. Using a realistic figure keeps you from underpricing.

Does this include sales tax or VAT?

No. Sales tax/VAT is charged to the client separately and passed on to the tax authority — it isn't your income, so it isn't part of the rate. The calculator works with pre-tax amounts.