Freelance Rate Calculator
Work out what to actually charge as a freelancer. Most people set rates too low by forgetting that not every hour is billable and that expenses and taxes come out first. This works backwards from your income target to a rate that covers everything.
How to use this calculator
- Enter your target take-home income and annual business expenses.
- Set your tax rate, realistic billable days per week and weeks off.
- The result is the day and hourly rate that covers everything — treat it as your floor.
Formula used
Work backwards: gross up your target income for tax, add expenses to get the revenue you need, then divide by realistically billable days (not total days — admin, sales and downtime aren't billable). This gives the minimum rate that actually funds your goal.
Example calculation
Target 45,000 take-home, 8,000 expenses, 30% tax, 3.5 billable days over 46 weeks: gross needed ≈ 72,300 ÷ 161 billable days ≈ ~449/day (~64/hour).
Charging a "salary ÷ 2080 hours" rate of ~22/hour would leave you badly short — that's the classic freelancer trap.
Why freelancers underprice themselves
The most common freelance pricing mistake is dividing a desired salary by a full year of working hours — because that assumes every hour is billable and ignores that you're now paying your own taxes, expenses and benefits. In reality only a fraction of a freelancer's week is billable: time goes to finding clients, admin, invoicing, learning and unpaid gaps between projects. A realistic utilisation might be half to three-quarters of nominal working time.
This calculator works backwards from what you actually want to keep. It grosses your target up for tax, adds your business expenses, then divides only by the days you can realistically bill — producing a rate that funds your real goal rather than an optimistic fiction. The result usually surprises people by how much higher it is than their instinct, which is exactly the point: it's the floor beneath which you're effectively subsidising clients. Where your work delivers clear value, pricing above this floor is not just fair but smart.
Why use this calculator?
- Set a rate that actually covers taxes, expenses and unbillable time.
- Escape the 'salary ÷ 2080 hours' trap that underprices freelancers.
- Work from the income you want to keep, backwards to the rate.
Frequently asked questions
How do I calculate my freelance rate?
Work backwards from your target take-home: gross it up for tax, add business expenses to get the revenue you need, then divide by the days you can realistically bill in a year (not every working day). This gives a rate that covers everything, not just your time.
Why can't I just divide a salary by working hours?
Because that ignores three things: you now pay your own taxes and benefits, you have business expenses, and much of your week is unbillable (sales, admin, gaps between clients). Dividing a salary by 2,080 hours dramatically underprices freelance work.
What is a good utilisation rate for freelancers?
Realistically 50–75% of nominal working time is billable — the rest goes to finding work, admin and downtime. Your rate must cover the unbillable portion, which is why billable days per week (not five) is the key input here.