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Tavli One

Income and commission

Freelance Hourly Rate Calculator

Work out the hourly rate you need to earn your target income after expenses and unbillable time.

Free No sign-up

Your figures

$

The amount you want to pay yourself before personal tax.

$

Software, insurance, equipment, accounting and other business costs.

hours

Hours you can actually charge for, not total working hours.

weeks

Allow for holidays, sickness and quiet periods.

%

A buffer on top of income and expenses for tax, late payments and gaps.

Results update as you type. * required

What this calculator does

A freelance rate is not your old salary divided by 2,080 hours. You pay your own holidays, tools, insurance and admin time, and only a fraction of your working week is billable.

This calculator builds the rate from the income you want, the costs the business carries and the hours you can genuinely charge for.

How the calculation works

Desired income and annual business expenses are added together, and an optional contingency is applied, to give the revenue the business must generate.

That revenue is divided by annual billable hours, calculated from billable hours per week and working weeks per year, to produce the hourly rate. Monthly and day-rate equivalents are shown for quoting.

Worked example: A freelancer targeting 60,000 income

  1. 1Desired income: 60,000.00
  2. 2Business expenses: 12,000.00
  3. 3Contingency: 10% of 72,000.00 = 7,200.00
  4. 4Required revenue: 79,200.00
  5. 5Annual billable hours: 25 × 46 = 1,150
  6. 6Hourly rate: 79,200.00 ÷ 1,150 = 68.87

The freelancer needs to charge at least 68.87 per billable hour, or about 551.00 for an eight-hour day.

Common mistakes

  • Dividing a salary by 2,080 hours and ignoring holidays, admin time and business costs.
  • Counting all working hours as billable. Most freelancers bill 50–70% of their time at best.
  • Setting a rate once and never revisiting it as costs rise.
  • Quoting a day rate that assumes eight billable hours when the real figure is closer to five.

Frequently asked questions

How many billable hours should I assume?
Be conservative. A common starting point is 20–30 billable hours in a 40-hour week, because admin, marketing and sales take the rest. Underestimating this is the fastest route to an unsustainable rate.
Should the contingency be a percentage?
A percentage buffer is simple and scales with your costs. Ten percent is a reasonable starting point for tax and late payments, but adjust it to your circumstances.
Does this include personal tax?
The desired income is before personal tax, and the contingency can cover it. If you want to take home a specific amount, gross it up for tax before entering it as desired income.
How do I convert the hourly rate to a project price?
Estimate the billable hours the project will take, multiply by the rate, then add a risk allowance for scope changes. Fixed-price projects carry more risk than hourly work, so the effective rate should be higher.

Disclaimer: this calculator provides general estimates for planning. It is not accounting, tax, legal or financial advice. Confirm important figures with a qualified professional in your jurisdiction.