How do I calculate a freelance hourly rate?

Add your annual pay target and business expenses, include a reserve or profit buffer, then divide the required revenue by your expected billable hours.

Should freelancers charge by the hour or by project?

Hourly pricing is useful for uncertain scope, while project pricing is useful when deliverables and revision limits are clear. Many freelancers calculate an internal hourly rate and quote a project price from the expected hours.

Does this calculator include taxes?

No. It uses a general reserve field that you can adjust, but it does not calculate tax rules or replace advice from an accountant.

Freelancer Rate Calculator

Runs in your browser No signup Quote-ready output

Calculate a sustainable freelance rate

Use the presets or enter your own numbers. The calculator separates annual targets, non-billable time, business expenses, reserve, and project scope so your quote is not based on a bare salary conversion.

Recommended hourly rate $0/hr Adjust your assumptions to calculate a rate.

Inputs

Annual target

Annual personal pay target Before any local tax planning. Monthly business expenses Software, insurance, hardware, office, admin. Reserve and profit buffer A general buffer, not a tax calculation. Currency

Available time

Weeks off per year Work days per week Work hours per day Billable time Client work as a percent of available hours.

Project quote

Project delivery hours Meetings and admin hours Scope buffer Revision rounds included

Results

Quote-ready hourly rate $0/hr

Rounded to a clean quoting number.

Day rate $0/day

Based on your work hours per day.

Project quote $0

Includes delivery, admin, and scope buffer.

Billable hours 0/yr

After time off and non-billable work.

Monthly revenue target $0

Revenue needed before expenses and buffer.

Breakdown

Client quote checklist

Freelance rate formula

The calculator starts with your target annual pay and business expenses, then accounts for the time you cannot bill to clients.

Hourly rate = (annual pay target + annual expenses) / (1 - reserve %) / annual billable hours

Project quotes use the same internal hourly rate, multiplied by delivery hours, meetings, admin time, and a scope buffer.

What to include in expenses

Software, subscriptions, hosting, licenses, and payment fees.
Professional insurance, bookkeeping, legal templates, and accounting support.
Equipment replacement, workspace, marketing, learning, and unpaid sales time.

What is a good freelance hourly rate?

A good rate covers your target pay, business expenses, non-billable time, unpaid sales/admin work, and a buffer. The right number varies by niche, experience, location, client value, and scope clarity.

Why does billable time matter so much?

Freelancers rarely bill every working hour. Sales calls, proposals, learning, bookkeeping, marketing, revisions, and downtime all reduce billable capacity. A sustainable rate should be based on realistic billable hours.

Should I show my internal hourly rate to clients?

Not always. Many freelancers use an internal hourly rate to price projects, then present a fixed scope, deliverables, timeline, assumptions, and revision limits.

Can this replace an accountant?

No. The reserve field is only a planning buffer. Tax rules, deductions, retirement planning, entity structure, and local compliance should be reviewed with a qualified professional.