Freelance Hourly Rate Calculator — your realistic floor
Work backwards from target income, expenses, tax and billable hours to the minimum rate that supports them.
Free and instant — results appear in seconds. No sign-up, no limits, and nothing you type is stored.
Most freelancers set rates by dividing a target salary by 2,080 hours. That produces a number roughly half what is actually needed, because it assumes every working hour is billable and that gross equals net.
This works the other way: from take-home target, through tax and expenses, to the revenue required, divided by hours a client will actually pay for.
The billable percentage is where the estimate lives or dies.
The gap between the naive figure and the real one
Target take-home 3,000,000 a year. Expenses 400,000. Tax 20%. Working 48 weeks at 35 hours, 65% billable.
Revenue required per year 4,150,000
Working hours per year 1,680 hours
Billable hours per year 1,092 hours
Minimum hourly rate 3,800.18
Suggested day rate (8h) 30,401.47The naive calculation — 3,000,000 ÷ 2,080 — gives 1,442 an hour. The real floor is 3,800, more than two and a half times higher.
The three multipliers, in order of size:
Billable percentage. Only 65% of working hours are paid. Sales calls, proposals, invoicing, admin, tool maintenance and learning are all unbilled. Cutting 1,680 hours to 1,092 is the single largest adjustment.
Tax. Take-home is not revenue. At 20% effective, earning 3,000,000 net requires 3,750,000 gross.
Expenses. Software, hardware, insurance, accounting, workspace. These come off the top.
Each of these is obvious in isolation, and each is routinely omitted from a rate calculation.
Billable percentage in practice
Sustained rates by experience:
- New freelancers: 40–55%. Time goes to finding work.
- Established: 60–70%. Referrals cut sales effort.
- Agency-fed: 70–80%. Someone else does the selling, at a discount to your rate.
Above 80% is not sustainable long-term. It means no time for business development, and the pipeline eventually empties.
This is a floor, not a price
The output is the minimum that supports your stated life. It says nothing about what the work is worth.
Value-based pricing frequently exceeds this number substantially. A piece of work that saves a client 500,000 a year is not priced by how many hours it took. Use this figure to know when to walk away, then price against value.
Rates and hours
A higher rate reduces the hours needed, which reduces the sales effort needed, which raises the billable percentage. The relationship compounds in your favour.
Cutting rates to win volume runs the same loop in reverse: more hours, more clients, more admin per unit of revenue, lower billable percentage — meaning the volume never quite compensates.
Frequently asked questions
What billable percentage should I assume?
Sixty to seventy percent for an established freelancer. New freelancers typically manage 40 to 55 percent because so much time goes to finding work. Above 80 percent is not sustainable, since it leaves no time for business development and the pipeline eventually empties.
Why is the calculated rate so much higher than a salary equivalent?
Because a salary covers paid leave, employer tax contributions, equipment, insurance and idle time, none of which a freelancer receives. Once you account for unbillable hours, tax and expenses, the required rate is commonly two to three times the naive hourly equivalent of a salary.
Should I charge hourly or by project?
Project pricing usually earns more, because it captures value rather than time and rewards you for working efficiently instead of penalising it. Use this calculation to establish the floor, then quote projects against the value delivered.
Does this include unpaid leave and sick days?
Indirectly, through the working weeks figure. Set it to the weeks you actually expect to work — 48 allows about four weeks off. If you want a genuine buffer for illness and slow periods, use a lower number.
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