Freelance hourly rate calculator

The rate you need to charge to earn what you want, after your costs, your time off and the hours you can’t bill.

Income you want a year

Business costs a year

Currency

Weeks off a year

Hours worked a week

Billable share (%)

Buffer (%)

Your hourly rate Day rate (8 hours) · you need a month

Weeks worked

Hours worked a year

Hours you can bill

To earn, with costs and buffer

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The formula

Hourly rate = (income + business costs) × (1 + buffer) ÷ billable hours

Billable hours = (52 − weeks off) × hours a week × billable share. With the figures above: (100,000 + 10,000) × 1.10 ÷ (46 × 40 × 70%) = 121,000 ÷ 1,288 hours = about 93.94 an hour.

What to count as business costs

Computer, phone and other equipment, spread over the years you use them
Software, hosting and subscriptions
Insurance, accountant and bank fees
Health insurance and pension, which an employer would otherwise pay
Coworking space or a home office, training and travel

Questions

How do I calculate my freelance hourly rate?

Add the income you want to the costs of running your business, then divide by the hours you can bill in a year. Billable hours are the weeks you work × the hours a week × the share of time spent on paid work.

Why not just divide a salary by 2,080 hours?

Because a freelancer pays for their own holidays, sick days, equipment, software, insurance and pension, and spends part of every week finding work, writing proposals and doing accounts. Few freelancers bill more than 60% to 75% of their working hours.

What income should I enter?

What you want to earn before income tax: the salary you would compare the work with, plus what an employer would have added for you, such as pension contributions and health insurance.

What is the buffer for?

For quiet months, late payments and clients who leave. 10% to 20% is common.

How do I get a day rate?

The calculator multiplies the hourly rate by 8 hours. Change it to suit how long your working day is.

Does this include tax?

No. The rate covers your income before tax and your business costs. Sales tax or VAT, where you charge it, is added to the invoice on top.

More free tools

A free tool by Avenstra Software, a software company in Sri Lanka. We build business software, integrations and AI assistants. Talk to us about your project.