Hourly Rate Calculator
Work out the hourly rate you need to hit a target annual income — accounting for unpaid time off, so freelancers do not undercharge.
How it works
Billable hours = hours/week × working weeks · Rate = (target income + expenses) ÷ billable hours
Dividing a salary by 2,080 hours (40 × 52) badly understates the rate a freelancer needs, because not every hour is billable and not every week is worked. Vacation, holidays, sick days, admin and sales time all shrink the pool of hours you actually invoice, and business expenses must be earned back on top of your take-home target. Spreading the same income over fewer billable hours is why a sustainable freelance rate is often two to three times an equivalent employee’s hourly wage.
Worked example
To net $90,000 plus $6,000 of expenses on 30 billable hours a week for 46 weeks, you bill 1,380 hours a year, so the rate is 96,000 ÷ 1,380 ≈ $69.57 an hour — far above the $43.27 you would get from a naïve 40×52 split.
Frequently asked questions
Why is my freelance rate so much higher than an employee wage?
Employees are paid for holidays, get benefits, and have their employer cover payroll taxes and overhead. As a freelancer you fund all of that yourself and bill only a fraction of your working hours, so your rate must be much higher to reach the same take-home.
What counts as a billable hour?
Only time a client pays for. Admin, marketing, proposals, learning and breaks are real work but not billable, which is why most freelancers bill 25–35 of a 40-hour week rather than all 40.
Should I add taxes on top of this rate?
This calculates the rate to reach a target income before income and self-employment tax. If your target is take-home after tax, gross it up first, or set the target to your desired pre-tax profit.
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Educational estimate, not financial or tax advice. Real taxes, benefits and offers vary — confirm details with your employer or a professional.