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Freelance Hourly Rate Calculator

Find out exactly how much you need to charge per hour to cover expenses, take vacations, and hit your annual income goals.

Financial Goals

Time & Productivity

*Billable % is the amount of time you spend doing actual paid client work, instead of admin, marketing, or emails. (Standard is 50-60%)

Minimum Hourly Rate

$0.00/hr
Total Required Revenue$0.00
Total Billable Hours/Yr0

Charge at least this amount per hour to cover your business expenses, achieve your profit margin, and hit your target income, while still taking your designated weeks off.

Last updated: August 2026

Why You Need a Strategic Freelance Rate

One of the biggest mistakes new freelancers make is setting their hourly rate by simply dividing their desired salary by 2,080 hours. Unlike salaried employees, freelancers have to pay for their own health insurance, retirement, software, marketing, and self-employment taxes—plus, you won't be billing clients for 100% of your working hours.

How to Use This Tool

Input your target annual salary and realistic business expenses. Most importantly, accurately estimate your billable hours (time actually spent on client work) versus non-billable administrative time. The calculator will output the exact minimum hourly rate you need to charge to reach your financial goals.

The Formula

Required Revenue = (Target Income + Business Expenses) ÷ (1 − Profit Margin)

Billable Hours/Year = (52 − Weeks Off) × Hours per Week × Billable %

Hourly Rate = Required Revenue ÷ Billable Hours/Year

Worked Example

Say you want $75,000 take-home income, have $5,000 in annual business expenses, want a 10% profit buffer, take 4 weeks off, work 40 hours/week, and are billable 60% of that time:

  • Required revenue: ($75,000 + $5,000) ÷ (1 − 0.10) = $80,000 ÷ 0.9 ≈ $88,889
  • Billable hours/year: (52 − 4) × 40 × 0.60 = 48 × 40 × 0.60 = 1,152 hours
  • Hourly rate: $88,889 ÷ 1,152 ≈ $77.16/hr

Frequently Asked Questions

A billable hour is time spent actively working on a client's project that you can charge them for. Administrative tasks, marketing, and invoicing are non-billable hours.
Most successful freelancers aim for a billable utilization rate between 60% and 75%. The remaining 25-40% of your time will go toward running the business itself.
Yes, you should account for both income tax and self-employment tax. Freelancers typically need to set aside 25% to 30% of their gross income for taxes, though your actual rate depends on your tax bracket and state - consult a tax professional for your specific situation.
It's a buffer on top of your target income and expenses - not double-counting your salary. It covers things your target income figure doesn't, like slow months, unpaid invoices, taxes, and money to reinvest or save for irregular income years. A 10-20% buffer is a common starting point for freelancers.
Required Revenue = (Target Income + Business Expenses) ÷ (1 - Profit Margin). Then, Hourly Rate = Required Revenue ÷ Billable Hours per Year, where Billable Hours = (52 - Weeks Off) × Hours per Week × Billable %.
Most new freelancers underestimate two things: how much of their working time is actually billable (usually 50-75%, not 100%), and how many weeks off they need to budget for. Both reduce your effective working hours, which raises the rate needed to hit the same annual income.
Treat this as your minimum floor, not your target rate. Many freelancers charge above this baseline for rush work, specialized expertise, or high-demand periods, and may offer selective discounts for long-term or high-volume clients.
No. This tool provides a general planning estimate based on the numbers you enter. It isn't financial, tax, or business advice - for guidance specific to your situation, consult a qualified accountant or financial advisor.

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