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What should you charge per hour as a freelancer? Our free freelance hourly rate calculator works backwards from the income you want, adding your real billable hours, business expenses and a tax buffer to reveal the rate that actually sustains your lifestyle. No more guessing — just enter five numbers and get a rate you can quote with confidence.
How the freelance rate calculator works
The calculator builds your rate from the ground up:
- Step 1: it multiplies your billable hours per week by your weeks worked per year to get your true annual billable hours.
- Step 2: it divides your target annual income by those hours to get your base hourly rate.
- Step 3: it spreads your annual business expenses across the same hours and adds that cost per hour.
- Step 4: it applies your tax and safety buffer percentage, because freelancers pay their own taxes and need a cushion for quiet months.
Billable hours are not working hours
The biggest mistake new freelancers make is dividing their target salary by 2,080 (40 hours × 52 weeks). You will never bill every hour you work. Proposals, admin, marketing, learning and chasing invoices are all unpaid. Most freelancers bill 50–75% of their working time, so 25–30 billable hours a week is realistic for a full-time practice. Be honest here — underestimating non-billable time is the fastest route to burnout.
Do not forget your expenses
Employees get software, hardware, insurance and an office for free; freelancers buy their own. Add up everything: subscriptions, a laptop replacement fund, professional insurance, accounting fees, coworking or home-office costs, and your own training. Even modest setups easily reach $3,000–$8,000 a year. These costs must be covered by your rate, not absorbed into your take-home pay.
The tax and safety buffer
Unlike employees, freelancers pay both halves of social security (in the US, 15.3% self-employment tax), plus income tax, with no employer withholding. A 25–30% buffer is a sensible starting point in most countries: it covers taxes and leaves a margin for holidays you did not plan, late-paying clients and the occasional dry month. If your country’s total tax take is higher, raise the buffer accordingly.
Worked example: targeting $80,000 a year
Say you want $80,000 a year, bill 30 hours a week, work 46 weeks, spend $5,000 on expenses and add a 25% buffer:
- Billable hours: 30 × 46 = 1,380 hours
- Base rate: $80,000 ÷ 1,380 = $57.97/hour
- Expenses per hour: $5,000 ÷ 1,380 = $3.62/hour
- Rate with expenses: $61.59/hour
- With 25% buffer: $61.59 × 1.25 = $76.99/hour
So you should charge about $77 an hour (round up to $80 for clean quoting) — far more than the $38.46 you would get by naively dividing $80,000 by 2,080.
Freelance rate FAQs
How do I calculate my freelance hourly rate?
Divide your target annual income by your true billable hours (billable hours per week × weeks worked), add your hourly share of business expenses, then add a 25–30% buffer for taxes and downtime. The calculator above does all of this for you.
How many billable hours should I assume?
Most full-time freelancers bill 25–30 hours a week after admin, marketing and proposals. Start with 25 if you are unsure — it is better to discover you have spare capacity than to set a rate that leaves you underpaid.
Should I charge more than my old salary’s hourly equivalent?
Almost certainly yes. An employee’s hourly equivalent ignores employer-paid taxes, benefits, paid leave and the freelancer’s unpaid admin time. Freelance rates of 1.5–2× the equivalent employee rate are normal and justified.
What expenses should I include?
Include everything the work costs you: software subscriptions, hardware replacement, professional insurance, accounting, coworking or home-office costs, training, and a fund for unpaid invoices. Even lean setups usually total several thousand dollars a year.
How do I handle taxes as a freelancer?
Set aside a fixed percentage of every invoice (the buffer in this calculator) in a separate account and pay estimated taxes quarterly. In the US, remember self-employment tax is 15.3% on top of income tax — employees only see half of it.
Should I ever lower my calculated rate?
Use your calculated rate as the anchor. Discounts for long retainers or great clients are fine, but never go below the rate that covers your target income — discounting below cost is just a slow way to go out of business.
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