Freelance Hourly Rate Calculator — What Should You Charge Per Hour?

Real-world use cases

• Set your first freelance rate after leaving a $90k job

  You just went independent from a $90,000 salaried role and a client asks for your hourly rate. Enter 90000 as the desired income, $12,000 of annual expenses, 25 billable hours a week, 48 working weeks, a 10% margin, and 25% for tax. The tool returns about $124/hour. That feels high until you see the breakdown: the $90k is only the base, and expenses, margin, and tax stack on top before dividing by the 1,200 hours you can actually bill. Quote $124, not the $43 you'd get from dividing salary by 2,080.

• Decide whether a fixed-price project pays your real rate

  A client offers $4,000 for a project you estimate at 40 billable hours. Use the calculator to find your floor rate — say it lands at $95/hour. 40 hours × $95 is $3,800, so $4,000 clears your floor with a little room. If your floor came out at $110, the same project pays only $100/hour effective and you'd be working below cost. The day rate the tool shows (rate × hours per day) is a fast sanity check against the project's implied daily pay.

• Build in a profit buffer instead of breaking even

  Charging exactly enough to cover salary, expenses, and tax leaves nothing for slow months, equipment failures, or reinvestment. Set the margin to 15% and watch the rate rise: on a $100,000 plus $10,000 expenses base, a 15% margin adds $16,500 to the revenue target before tax. That buffer is the difference between a business and a job that happens to be self-employed. The cost breakdown labels exactly how many dollars of your rate are profit versus pass-through cost.

• Price a senior designer's retainer

  Load the senior designer preset: $120,000 income, $15,000 expenses, 22 billable hours, 46 weeks, 12% margin, 28% tax. The rate comes out around $185/hour and the monthly revenue goal near $17,000. If a retainer client wants 30 hours a month, that's roughly $5,550 — now you can structure the retainer around a number that actually covers the business rather than guessing at a round figure that feels nice.

• Explain a rate increase to a long-term client

  A client pushes back on a rate bump. Open the calculator, enter your real numbers, and share the URL. They can see that rising software costs (expenses up $3,000) and a tax-bracket change (set-aside from 22% to 27%) account for the increase, not greed. Walking a client through the breakdown — base, expenses, margin, tax — turns "you got more expensive" into "here's what it costs to keep your project staffed."

Common pitfalls

• Entering 40 billable hours per week. Almost no freelancer bills 40 — utilization is typically 50–65%, so 20–26 is realistic. Padding the billable figure spreads your costs over hours you'll never invoice and produces a rate that's too low to survive on.

• Forgetting business expenses, or double-counting your salary inside them. Expenses are the costs an employer used to cover (software, hardware, insurance, accounting), not your take-home pay. Put your income in the desired-income field and only true overhead in expenses, or the rate will be off in both directions.

• Adding tax as a flat percentage on top instead of grossing up. If you need $100k after a 25% set-aside, you must divide by 0.75 ($133,333), not multiply by 1.25 ($125,000) — the latter leaves you short. The tool grosses up correctly, but if you hand-check the math, divide, don't add.

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