How do I calculate my freelance hourly rate?

Add up your desired annual income, business expenses, and benefits costs. Divide by your total billable hours per year (weekly billable hours × working weeks). The result is your minimum viable hourly rate.

What counts as a business expense for freelancers?

Common freelance business expenses include software subscriptions, equipment, home office costs, professional development, accounting fees, and self-employment taxes (roughly 15.3% of net income).

What is a realistic number of billable hours per week?

Most full-time freelancers bill 20–30 hours per week. The rest of their time goes to admin, sales, and non-billable work. If you're just starting out, 15–20 is a safer estimate.

Should I include benefits in my freelance rate?

Yes, if you're replacing a salaried job. Health insurance, retirement contributions, and paid time off add roughly 20–30% on top of base salary. The calculator includes a benefits toggle to account for this.

Why is my calculated rate higher than my old salary divided by 2,080 hours?

An employee is paid for every scheduled hour; a freelancer is only paid for billable hours, which are typically half of hours worked. A freelancer also carries expenses and benefits an employer used to cover. Spreading the same income over roughly 1,200 billable hours instead of 2,080 paid hours pushes the required rate up 60–80%.

Does the calculator account for income taxes?

Only if you put them in. Self-employment tax (15.3% on net earnings) belongs in the expenses field; federal and state income tax vary too much by filing situation for a fixed assumption, so the take-home figure you enter should be your genuine after-tax target.

Is anything I type into the calculator stored or sent anywhere?

No. The math runs entirely in your browser with plain JavaScript. Your income goal, expenses, and hours never leave your device, are never stored, and are never attached to analytics.

Freelance Hourly Rate Calculator — What Should I Charge?

Freelance Hourly Rate Calculator

Enter your income goal, expenses, and available hours. Get the minimum rate you need to charge to actually hit your number.

Desired annual take-home income

What you want to actually keep after taxes and expenses.

Annual business expenses

Software, equipment, accounting, self-employment tax (~15%), etc.

Billable hours per week

Hours you can actually bill clients. Most freelancers bill 20–30 hrs/week.

Weeks off per year

Vacation, holidays, sick days. 4 weeks is a common baseline.

Add ~25% benefits overhead (health insurance, retirement)

Your minimum hourly rate

How it works

1. Enter your target income, business expenses, and how many hours a week you can actually bill.
2. Set your weeks off — unpaid time reduces your annual billable hours and raises your required rate.
3. Toggle benefits if you're replacing a salaried job with health insurance and retirement contributions.

What the calculator actually computes

There is no black box here. The tool computes one number — your minimum viable hourly rate — with one formula:

minimum rate = (income goal + expenses + benefits overhead) ÷ (billable hours/week × (52 − weeks off))

Each term matters more than it looks. The denominator is the one people get wrong: it counts billable hours, not working hours. If you work 40 hours a week but only 25 of them are invoiceable — the rest going to proposals, email, bookkeeping, and finding the next client — then 25 is your number. Using 40 there is the single most common way freelancers underprice themselves, because it silently assumes every working hour produces revenue. It doesn't, for anyone.

The benefits toggle adds 25% of your income goal, a mid-range estimate for what employer-provided health insurance, retirement matching, and paid leave are worth. The U.S. Bureau of Labor Statistics' Employer Costs for Employee Compensation series consistently puts benefits at roughly 29–31% of total compensation for private-sector workers, so 25% of base salary is a deliberately conservative stand-in. If you know your actual health-insurance premium and retirement target, put the real dollar figures in the expenses field instead and leave the toggle off — real numbers always beat estimates.

The output is a floor, not a suggested price. It is the rate below which your plan mathematically fails: bill every projected hour, collect every invoice, and you still land short of your target. Market positioning, specialization, and demand determine how far above the floor you can charge — that's what the guides cover.

Three worked examples

The default scenario. A freelancer wants $75,000 take-home, carries $5,000 of annual expenses, bills 25 hours a week, and takes 4 weeks off. That's 48 working weeks × 25 hours = 1,200 billable hours, and ($75,000 + $5,000) ÷ 1,200 = $66.67/hour. Notice how far that sits from the naive $75,000 ÷ 2,080 = $36/hour a salaried mindset would suggest — an 85% difference, before benefits.

Replacing a salaried job. A designer leaving an $85,000 job with good benefits budgets $6,000 in expenses, expects 28 billable hours a week, keeps 4 weeks off, and toggles benefits on. Benefits overhead adds $21,250 (25% of $85,000), so gross needed is $112,250 across 1,344 billable hours: $83.52/hour. That is the honest cost of replacing an employer — and why "I'll just charge my old salary divided by 2,080" ends with a pay cut nobody noticed until tax season.

A deliberate part-timer. A parent freelancing around school hours wants $20,000 a year from 10 billable hours a week, 2 weeks off, $1,500 in software and insurance. 500 billable hours means ($20,000 + $1,500) ÷ 500 = $43/hour. Part-time freelancing at $25/hour "because I'm only doing this on the side" quietly halves the goal. Small books need mid-market rates, not discount rates.

Who this is for — and what it won't tell you

The calculator is built for independent freelancers, consultants, and contractors pricing their own time: developers, designers, writers, marketers, bookkeepers, photographers, tutors — anyone who invoices by the hour or needs an hourly floor to sanity-check a project quote. It is most useful at two moments: when you're leaving employment and have no idea what your salary translates to, and when you suspect your current rate was set by copying someone else rather than by arithmetic.

Be equally clear about what it does not do. It doesn't know your market — a floor of $66/hour doesn't mean clients in your niche will pay it (see the rate ranges by skill area and the benchmarking methodology for that side of the problem). It doesn't model federal or state income tax, which depends on filing status, deductions, and where you live — put self-employment tax in expenses and treat the income field as a genuine after-tax target. It assumes every billable hour is actually collected, so late-paying and non-paying clients (see the invoicing and net-terms guide) erode the result in the real world. And it prices time, not value: fixed-fee and retainer work should be quoted on outcomes, with the hourly floor used only as an internal sanity check. Estimates only — not financial, tax, or legal advice.

Guides

Deeper reading on rate-setting, taxes, and the business side of freelancing.

Common questions

How do I calculate my freelance hourly rate?: Add your desired income, business expenses, and benefits costs. Divide by total billable hours per year. That's your floor — charge below it and you'll fall short.
What counts as a business expense?: Software, equipment, home office, professional development, accounting fees, and self-employment taxes (roughly 15.3% of net income). Most freelancers underestimate this number.
What's a realistic billable hours estimate?: Most full-time freelancers bill 20–30 hours per week. Admin, sales, and non-billable work take the rest. Starting out? Use 15–20 to be safe.
Should I add benefits to my rate?: Yes, if you're replacing a job with employer benefits. Health insurance and retirement contributions add 20–30% on top of base salary. The toggle above adds 25% as a starting estimate.
Why is my calculated rate higher than my old salary divided by 2,080 hours?: An employee is paid for every scheduled hour; a freelancer is paid only for billable ones — typically about half of hours worked. Add the expenses and benefits an employer used to absorb, spread the same income over ~1,200 hours instead of 2,080, and the required rate lands 60–80% higher. That's arithmetic, not greed.
Does the calculator account for income taxes?: Only if you put them in. Self-employment tax belongs in the expenses field; federal and state income tax vary too much by filing situation for a one-size assumption, so treat the income field as your true after-tax target. The self-employment tax guide walks through the 15.3%.
Is anything I type stored or sent anywhere?: No. The math runs in your browser in plain JavaScript — view source and you can read the whole formula. Your numbers never leave your device and are never attached to analytics.