Freelance Rate Calculator
An Employee's Salary and a Freelancer's Rate Aren't the Same Math
A freelancer's hourly rate has to cover far more than an equivalent salary, because there's no employer absorbing taxes, benefits, or the hours spent on unpaid admin, marketing, and slow weeks. This calculator works backward from a target take-home income to the rate you actually need to charge on billable hours alone.
The Formula
Pre-tax Need = (Desired Income + Business Expenses) / (1 − Tax Rate / 100)
Billable Hours per Year = Billable Hours per Week × Weeks Worked per Year
Hourly Rate = Pre-tax Need / Billable Hours per Year
Billable Hours per Year = Billable Hours per Week × Weeks Worked per Year
Hourly Rate = Pre-tax Need / Billable Hours per Year
Fewer Billable Hours Means a Higher Required Rate
| Billable hours/week | Billable hours/year | Required rate |
|---|---|---|
| 20 | 960 | $122.22 |
| 25 | 1,200 | $97.78 |
| 30 | 1,440 | $81.48 |
| 35 | 1,680 | $69.84 |
| 40 | 1,920 | $61.11 |
Dropping from 40 to 20 billable hours per week roughly doubles the required rate on this example — a direct consequence of the same annual target spread across half as many paid hours.
Where This Gets Used
- Setting a starting rate — new freelancers frequently underprice by anchoring on a former salary's hourly equivalent, without accounting for unbillable time and self-paid taxes.
- Adjusting for a slow season — recalculating with fewer expected weeks worked shows how much the rate needs to rise to hit the same annual target.
- Pricing a proposal against overhead — factoring in software, equipment, or contractor costs as business expenses before setting the rate.
How to Use This Calculator
- Enter Desired Annual Income (your target take-home, before tax).
- Enter Annual Business Expenses.
- Enter Tax Rate as a percentage.
- Enter Billable Hours per Week and Weeks Worked per Year.
- Select Calculate to see the hourly rate needed to hit your target.
Related Calculations
See what a salaried offer nets after taxes with the Take-Home Pay Calculator, or compare it against a full job offer with the Job Offer Comparison Calculator.