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Invoice Generator Tool

Freelance hourly rate calculator

Find the minimum hourly rate you need to charge to hit your income goal after tax and business costs, based on the hours you can realistically bill.

Software, equipment, insurance, co-working, accountant, etc.

%

52 minus holidays, sick days and slow weeks.

Billable hours per year
1,150
Revenue you need
109,000.00
Day rate (8 hours)
758.26

Minimum hourly rate

94.78

How the calculation works

  1. Gross up your income for tax. To take home 75,000 at a 25% tax rate, you need 75,000 ÷ 0.75 = 100,000 before tax.
  2. Add business expenses. Software, hardware, insurance, accounting, co-working and so on.
  3. Count your billable hours. Billable hours per week × working weeks per year. Leave out holidays, sick days and quiet periods.
  4. Divide. Revenue needed ÷ billable hours = minimum hourly rate.

The day rate shown is simply 8 × the hourly rate.

Example

A designer wants 60,000 take-home, has 6,000 of yearly costs, expects 20% tax, and can bill 25 hours a week for 45 weeks.

Treat it as a floor, not a price

This is the least you can charge to meet your goal. Your market rate may be higher based on your experience, niche and results. Round up, review your rate every year, and give existing clients notice before increases.

When you invoice, use the freelance invoice template and list hours × rate for each task.

Frequently asked questions

How do I calculate my freelance hourly rate?

Add your take-home income goal grossed up for tax to your yearly business expenses, then divide by the number of hours you can bill in a year.

How many billable hours should I assume?

Far fewer than you work. Admin, sales, invoicing and learning take a large share of the week, so 20 to 30 billable hours a week is typical for full-time freelancers.

Should I charge hourly or per project?

Your hourly rate is the floor either way. For projects, estimate the hours, multiply by your rate, and add a buffer for revisions and unknowns.

Why is my rate so much higher than my old salary per hour?

As a freelancer you pay for your own equipment, software, insurance, holidays, sick days and unpaid admin time. Employees get those covered. Your rate has to include them.

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