Freelance Hourly Rate Calculator

Work backward from your target annual salary and business overhead to determine what hourly rate you need to charge to cover time off and taxes.

Input Details

Desired Annual Net Salary

The annual salary you want to pay yourself after taxes/expenses

Annual Business Expenses & Taxes

Estimate self-employment tax, healthcare, software, equipment

Billable Hours per Week

Realistic hours spent working directly on client projects (default 20-30)

Weeks Off per Year

Include vacation, public holidays, and potential sick leave

Results

Required Hourly Fee

Required Minimum Billing Rate

$79.17 /hr

To take home $80,000 in personal salary after paying $15,000 in business costs, you must bill clients $79.17 per hour.

Required Annual Revenue$95,000

Annual Billable Hours1200 hours

Working Weeks / Year48 weeks

The Formula

Formula Overview:

1. Total Target Revenue = Desired Annual Salary + Annual Expenses
2. Annual Billable Hours = (52 - Weeks Off) × Billable Hours per Week
3. Required Hourly Rate = Total Target Revenue ÷ Annual Billable Hours

Example Calculation

If you want a net salary of $80,000, have annual overhead/taxes of $15,000, bill 25 hours/week, and take 4 weeks of vacation/sick time:
Target Revenue: $80,000 + $15,000 = $95,000 Hours: (52 - 4) × 25 = 48 weeks × 25 hrs = 1,200 billable hours Hourly Rate: $95,000 / 1,200 = $79.17 /hour

How to Use This Calculator

Enter your desired **Target Net Income** (what you want to take home as salary).
Enter your annual **Business Expenses** (including self-employment taxes, insurance, software, etc.).
Input the average **Billable Hours per Week** you realistically expect to invoice.
Enter the number of **Weeks Off** you want to take for vacation, holidays, and sick days.

When This Calculator is Useful

Use this calculator when **transitioning from full-time employment to freelancing**, revising your contract rates for the new fiscal year, or evaluating if your current pricing is enough to support your lifestyle.

Disclaimer Note

All results are estimates based on standard business formulas and rates. Actual project costs, ROI, and rates may vary based on market conditions, specific requirements, and contract agreements.

Frequently Asked Questions

Freelancers must work backward from their desired take-home income. You add your business expenses, taxes, and benefits to that salary to get your gross revenue target. Then, you divide that revenue target by the total number of hours you can bill clients (excluding time spent marketing, admin, or sick days).

As a freelancer, you run a business. A large portion of your week is spent on non-billable administrative tasks: writing proposals, marketing your services, bookkeeping, client correspondence, and scoping projects. Most successful freelancers average between 20 to 28 billable hours per week.

You should account for self-employment taxes (often 15-30% depending on location), health insurance, retirement savings, software subscriptions (e.g. Adobe, billing tools), internet/phone bills, hardware upgrades, and a buffer for sick leave and holidays.

Yes! While calculating your hourly rate is essential to know your bottom-line cost, charging clients flat-rate or value-based project fees is often much more lucrative. It avoids penalizing you for working faster and aligns client expectations around the project deliverables.