Freelance hourly rate calculator
To find your freelance hourly rate, add the income you want to take home to your yearly business costs, gross that up for tax, and divide by the hours you can really bill. For $80,000 take-home, $12,000 of costs, 30% tax and 25 billable hours a week over 46 weeks, that is about $114 an hour.
How the calculation works
- Revenue needed before tax = (take-home income + business costs) ÷ (1 − tax rate).
- Billable hours a year = (52 − weeks off) × billable hours a week.
- Hourly rate = revenue needed ÷ billable hours.
| Step | Worked example |
|---|---|
| Take-home plus costs | $80,000 + $12,000 = $92,000 |
| Grossed up for 30% tax | $92,000 ÷ 0.70 = $131,429 |
| Billable hours | 46 weeks × 25 hours = 1,150 |
| Hourly rate | $131,429 ÷ 1,150 = $114 |
Why billable hours matter most
The hours figure moves the result more than anything else. Dropping from 30 to 20 billable hours a week raises the rate you need by half. Count only time a client pays for: sales calls, proposals, invoicing and admin are real work, but they come out of your rate, not on top of it.
From an hourly rate to a project price
Clients often prefer a fixed price. Estimate the hours, multiply by your rate, then add 10 to 25% for revisions and unknowns. Write the scope down in a statement of work so extra requests are visible, and read how to handle scope creep before it eats the margin. For ongoing work, a retainer turns the same number into a monthly fee.
Track whether the rate holds
A rate is a plan; time logs show whether it held. In Flori you can log time on tasks next to the client and deal they belong to, so you can see where a fixed-price project ran over. See how Flori works for freelancers.
FAQ
How do I calculate my freelance hourly rate?
Add the yearly income you want to take home to your yearly business costs, divide by one minus your tax rate, then divide by the hours you can actually bill in a year. With $80,000 take-home, $12,000 costs, a 30% tax rate and 1,150 billable hours, that is about $114 an hour.
How many billable hours does a freelancer have in a year?
Fewer than most people expect. Sales calls, proposals, admin, invoicing and learning take time you cannot bill. Many full-time freelancers bill 20 to 30 hours in a 40-hour week, and take 4 to 8 weeks a year off for holidays, sickness and quiet periods.
Should I charge hourly, by the day or by the project?
Start from the hourly number either way, because it is your floor. Day rates suit work booked in whole days. Project and retainer prices suit clear scopes: estimate the hours, multiply by your rate, add a margin for risk, then quote the total rather than the hours.
What expenses should I include?
Software, equipment, insurance, accounting, health cover you pay yourself, retirement savings, coworking or home office costs, training and marketing. If you would pay it whether or not a client hires you, it belongs in the expenses figure.
Is the tax rate my income tax bracket?
Use your effective rate on business profit, including self-employment or social contributions where they apply, not your top bracket. If you are unsure, an accountant can give you the figure; 25 to 35% is a common planning number in the United States.
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