Not sure what to charge? This free calculator works out the minimum hourly rate you need to reach your income goal after tax, business costs, time off and a safety buffer. Change the numbers to match your situation and the result updates instantly. Nothing you enter is stored or sent anywhere.
How the calculator works
It works backwards from the income you want:
- Your take-home income divided by (1 minus your tax rate) gives the profit you must earn before tax.
- Adding your business costs gives the revenue you must earn before the safety buffer.
- Adding the buffer covers late payments, quiet months and other surprises.
- Dividing by your billable hours per year (billable hours per week times the weeks you work) gives your hourly rate.
A worked example
With the default numbers ($50,000 take-home, $4,000 of costs, a 25% tax rate, 25 billable hours a week, 6 weeks off and a 10% buffer): you need about $66,667 of profit before tax, plus $4,000 of costs, which is $70,667. Adding the 10% buffer brings the revenue target to about $77,733. You bill 25 hours for 46 weeks, which is 1,150 hours, so the minimum rate is about $67.59 an hour.
Why billable hours are lower than the hours you work
Admin, marketing, proposals, learning and chasing invoices are real work, but you cannot invoice for them. That is why the calculator asks for billable hours, not working hours. If you are not sure of your number, track your time for a few weeks and update the calculator with what you actually bill.
Tips for setting your rate
- Treat the result as your minimum, not your target.
- Use real numbers for costs and hours as soon as you have them.
- Review your rate at least once a year, and when your costs change.
- When you quote a fixed price for a project, use your hourly rate to check the price is still worth it.
Ready to bill at your new rate? Make an invoice with our free invoice generator.
Frequently asked questions
What is a good hourly rate for a freelancer?
It depends on your skills, your market and your costs, so there is no single number. Use this calculator to find your minimum, then compare it with what clients in your field are paying.
How many billable hours should I plan for each week?
Fewer than you work, because admin, marketing and sales time cannot be invoiced. Start with a realistic figure, track your time for a month and update the calculator.
Does the calculator include tax?
It uses one flat percentage on your profit, which is a simplification. Real tax depends on where you live and your situation, so check with an accountant.
Is my data saved?
No. The calculation runs in your browser, and nothing you enter is stored or sent to us.
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This calculator gives an estimate for planning. It is not financial or tax advice.