Business & Freelancing

Freelancer Hourly Rate Calculator

Freelance rates fail when fees and taxes are treated as an afterthought. Start from the income you want to keep and this calculator works backwards to the rate you must quote.

What this calculator does

Works backwards from the monthly income you want to keep, through platform fees and taxes, to the gross you must invoice, then divides by honest billable hours to give the hourly rate you need to charge.

How to interpret the result

The required rate is your floor, not your quote. If it is higher than expected, the cause is usually fees and tax coming out of gross plus unpaid time — both compound. Round the result up to a clean number and treat anything below it as work that loses you money.

Assumptions

• Fees and taxes are a steady percentage of gross invoicing.
• Billable hours per day and working days per month hold for a typical month.
• The target income is what you need to keep after all deductions.

Limitations

• Does not model irregular months with fewer billable days, which raise the required rate.
• Business expenses such as software and insurance must be folded into the deductions percentage.
• Currency and payment-processing fees vary by platform and are not itemised.

How it works

Fees and deductions are subtracted from 100% to find the share of gross income you keep. Your target income is divided by that share to give the gross you must invoice, then divided by billable hours per month to give the hourly rate.

Worked example

To keep 4,000 a month with 10% platform fees and 20% tax, you must invoice about 5,714. Across 120 billable hours that is roughly 48 an hour, or 286 a day.

How to use it

1. Enter the income you want to keep, not the amount you want to invoice.
2. Be honest about billable hours — admin, pitching and revisions are rarely paid.
3. Include every platform and payment-processing fee in the fees field.
4. Recalculate whenever tax rates or your working pattern change.

Factors to consider

• Unpaid time is the biggest hidden cost. Six billable hours in an eight-hour day is realistic, not lazy.
• Holidays, sick days and gaps between clients mean your average month has fewer billable days than a full one.
• Software, hardware and insurance are business costs that belong in the deductions percentage.

Useful for

• Setting a minimum rate below which a project is not worth taking.
• Pricing fixed-scope projects by estimating hours and multiplying by your floor.
• Re-checking your rate after a tax change or a shift in how many hours are billable.

Frequently asked questions