Freelance Rate Calculator: Hourly and Day Rate

What this tells you

Your freelance rate is the income you want plus your business expenses, grossed up for tax, divided by the hours you can actually bill in a year. Most freelancers and consultants bill 20 to 30 hours a week, not 40, because finding clients, admin and invoicing are unpaid. Price from billable hours and the rate usually comes out 1.5 to 2 times what an employee earns per hour.

Pricing · free tool

Freelance rate calculator

$80,000

Before tax, what you would take home as salary

$8,000

Software, equipment, insurance, health cover, accountant

28%

Income plus self-employment tax, as a share of revenue

6

Holidays, public holidays, sick days

25 h

Hours a client pays for, not hours worked

At those numbers

Billable hours per year
1150 h
Revenue you need per year
$122,222
Hourly rate
$106
Day rate (8 hours)
$850
Revenue per month
$10,185

This is arithmetic on the numbers you entered, nothing here is a forecast or a promise about results.

The formula

billable hours = (52 − weeks off) × billable hours per week · revenue needed = (income + expenses) ÷ (1 − tax rate) · hourly rate = revenue needed ÷ billable hours · day rate = hourly rate × 8

How to read the result

  • Billable hours is the input that moves the answer most. If you have never tracked it, assume 25 a week until you have a month of real numbers.
  • Compare the result with a salaried job: a freelance rate below about 1.5 times the employee hourly wage usually means you are paying yourself less once tax, holidays and unpaid sales time are counted.
  • If the rate looks too high for your market, the fix is more billable hours or lower expenses, not a lower rate. Cutting the rate means working more hours for the same income.
  • The same arithmetic works for consultants: put in the hours you bill to clients, not the hours you work.

Frequently asked questions

Add the yearly income you want to your business expenses, divide by one minus your tax rate, then divide by the hours you can bill in a year. Billable hours are usually 20 to 30 a week, minus holidays.

The same way: income plus expenses, grossed up for tax, divided by billable hours. Consultants often bill fewer hours than freelancers because sales and proposals take longer, which pushes the rate up.

Your hourly rate times the hours in a working day, usually 8. Many freelancers quote a day rate to avoid clients counting every hour.

Commonly 20 to 30 a week. The rest goes on finding clients, admin, invoicing and learning, which nobody pays for.

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