Freelancer Rate Calculator
Work out the hourly rate that actually supports the income you need, once the hours you cannot bill, the tax you have to withhold and the costs an employer used to cover are all accounted for.
Inputs
Result
Setting your first rate? See it worked step by step, and which assumption moves it most.
Planning estimate only. Replace assumptions with your real costs, contracts, taxes, and market conditions.
How it works
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Start from what you need to take home
Your target annual income after tax, not your old salary. The calculation grosses this figure up by the tax reserve and buffer, then adds your annual expenses on top.
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Subtract the time you cannot bill
Working weeks multiplied by hours per week multiplied by your billable share. Admin, pitching, holidays and sick days all live in the part you do not bill, and most freelancers overestimate what is left.
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Read the rate
The grossed-up total divided by the billable hours it has to come out of. The tool also shows how many billable hours a year that assumption actually gives you, which is usually the more surprising of the two numbers.
Who this is for
Going freelance
Converting a salary into an hourly rate one-for-one is the most common way to end up earning less than you did as an employee while working more.
Raising your rate
Seeing the arithmetic makes the conversation with a client easier to have, because the number stops being a preference and becomes a requirement.
Quoting a fixed price
Multiply a defensible hourly rate by an honest estimate of the hours, rather than picking a round number and discovering the hours afterwards.
Checking a retainer
Divide the retainer by the hours it really consumes — including the ones nobody logs — and compare it against the rate here.
Questions
- Why is the rate so much higher than my old salary divided by 2,080?
- Because that division assumes every working hour is billable and that someone else is paying your tax, pension, holiday, sick leave and equipment. None of that is true once you are freelance.
- What billable share should I use?
- Be pessimistic. Sixty percent is a good year for most solo freelancers once pitching, admin and invoicing are counted. If you have never measured it, start at 50 to 60 percent rather than 80.
- What is the buffer for?
- Gaps between contracts, a client who pays late, a month you cannot work. It is not profit; it is the reason a quiet month is not an emergency.
- What happens if tax and buffer reach 100 percent?
- At exactly 100 percent nothing is left to pay yourself, so no rate solves it and the result shows a dash alongside a warning. Above 100 percent the arithmetic goes negative and a negative rate is displayed — the warning is there because that figure means the inputs are wrong, not that you should charge it.
- Are expenses grossed up for tax too?
- No. The tax reserve is applied to your take-home target and the annual expenses are added afterwards, which assumes business costs come out before tax rather than after. If that is not how you are taxed where you are, raise the expenses figure to compensate.
- Should the rate be what I quote clients?
- It is the floor, not the price. It tells you what the year needs to average, and nothing about what a particular client or a particular piece of work is worth — which is frequently more.
- How much does the billable share change the rate?
- A great deal, which is why it is worth being honest about. At the defaults, 60 percent billable gives about 98 dollars an hour, 70 percent gives about 84 and 50 percent about 117. The result panel shows the rate ten points either side of your figure so you can see how much room a change in your week would buy.