How do I calculate my freelance hourly rate?

Work backwards from income rather than forwards from a number you have seen elsewhere. Add the take-home income you want to your annual business costs, divide by one minus your tax rate to get the revenue you must invoice, then divide that by the hours you can realistically bill in a year — which is far fewer than the hours you work.

How many hours a year can a freelancer actually bill?

Most established freelancers bill between 20 and 27 hours in a typical working week. The rest goes to finding work, writing proposals, invoicing, admin and unpaid revisions. Assuming 40 billable hours a week is the single most common reason a rate turns out to be too low.

Should I charge hourly or a fixed price?

The hourly rate is the floor beneath every quote, including fixed-price ones. Even when you quote a project fee, you need this number to know whether the fee is profitable at your estimated effort — and to know what an extra revision round actually costs you.

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Freelance hourly rate calculator

Most rate advice starts from what other people charge. This starts from what you need to earn, and works backwards — through tax, business costs, time off, and the hours you work but cannot bill. Everything happens in your browser; nothing is sent anywhere.

Currency

Only changes how numbers are displayed.

Take-home income you want per year

What you want to keep, after tax.

Business costs per year

Software, hardware, insurance, accountant, coworking.

Tax and contributions %

Income tax plus social contributions, combined.

Weeks not working per year

Holiday, illness, and the quiet weeks nobody plans for.

Billable hours per week

Hours a client actually pays for — not hours worked.

Your minimum hourly rate

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Revenue you must invoice: —
Weeks you are working: —
Billable hours a year: —
Goes to tax and costs: —

How this is worked out

No black box — it is four lines of arithmetic, and it is worth understanding because the result is only ever as good as the assumption you disagree with most.

Revenue needed. Your target income plus business costs, divided by one minus your tax rate. Tax is applied to the whole amount you invoice, so you have to gross up rather than simply add.
Working weeks. Fifty-two minus the weeks you are not working.
Billable hours. Working weeks multiplied by the hours a client actually pays for.
Rate. Revenue needed, divided by billable hours.

The number that matters most

Almost every rate that turns out to be too low was calculated with the wrong billable-hours figure. It is tempting to put 40 in that box, because that is a working week. But a working week is not a billable week.

Finding work, answering enquiries, writing proposals that go nowhere, scoping, invoicing, chasing invoices, bookkeeping, updating your portfolio, and revisions you did not manage to bill for — none of that is billable, and all of it is real. Most established freelancers land somewhere between 20 and 27 billable hours in a normal week.

Try it: set the box to 40 and then to 25, and watch what happens to the rate. That gap is the difference between a rate that works and one that quietly loses money all year.

This is a floor, not a price

What comes out is the rate below which you are working at a loss once the year is averaged out. It is not what you should quote.

A real price also reflects the value of the work to the client, how much risk you are absorbing, how badly you want the project, and what the market will bear. A rush job with a vague scope and an approval committee should cost more than this number — sometimes considerably more. Work that will produce a portfolio piece you want might reasonably cost less.

The floor's job is to make that a decision rather than an accident. If you know the number, you know what you are giving up when you go below it.

If you quote fixed prices

You still need this number. A project fee is only profitable relative to the effort it consumes, so the way to sanity-check a quote is to divide it by your honest hour estimate and compare against the floor.

It is also what tells you the cost of a change. When a client asks for a fourth round of revisions on a fixed-price job, the hourly figure converts "a couple more hours" into a number — and a number is much easier to have a conversation about.

Working out whether a specific job clears the floor

Knowing your rate answers half the question. The other half is how many hours a particular job will really take, which depends on how clearly it is scoped, how decisive the client is, and how many risks are hiding in the post.

That is what Opportunity Radar does: it reads a job post, scores it across seven weighted dimensions, lists the risks it found, and estimates the effort — so you can check the fee against this floor before you write the proposal. If you would rather do it by eye, the red flags guide covers what to look for.

The calculator is free and needs no account. Opportunity Radar has a free plan covering ten job posts a month.