Hourly Rate Calculator

Your Recommended Rates

Hourly Rate

$79.44

per billable hour

Daily

$636

8 hours

Weekly

$1,986

25 hours

Monthly

$7,944

average

Annual Breakdown

Desired take-home $60,000
Business expenses + $5,000
Profit margin (10%) + $6,500
Estimated taxes (25%) + $23,833
Total revenue needed $95,333
Divided by 1,200 billable hours/year

Pro Tip

Most freelancers only bill 50-70% of their work hours. The rest goes to admin, marketing, and learning. Adjust your billable hours accordingly!

Income Goal

$

What you want to pay yourself after business expenses

Quick presets

Business Expenses

$

Software, equipment, insurance, marketing, etc.

Billable Hours

25 hrs
5 hrs Part-time Full-time 50 hrs
48 weeks
20 weeks Accounting for vacation, holidays, sick days 52 weeks

1,200 total billable hours per year (25 × 48)

Taxes & Profit Margin

25%

Include self-employment tax (~15%) plus income tax

10%

Extra buffer for business growth, emergencies, and savings

How to Calculate Your Hourly Rate

1

Set Your Income Goal

Start by entering your desired annual take-home income. This is the amount you want to pay yourself after covering all business expenses.

The quick presets are based on common experience levels and can be used as a realistic starting point.

2

Add Business Expenses

Include your annual business expenses. This should cover everything required to operate your business.

Examples include software subscriptions, equipment, insurance, marketing, accounting, and professional services.

3

Estimate Billable Hours

Set realistic billable hours per week and the number of weeks you plan to work per year.

Most freelancers can only bill 50-70% of their total working hours, with the rest spent on admin, marketing, learning, and client communication.

4

Account for Taxes & Profit

Adjust your estimated tax rate and desired profit margin. Taxes help you set aside enough for obligations like income and self-employment tax.

The profit margin adds a safety buffer for slow periods and long-term growth.

Frequently Asked Questions

How do I know how many hours are billable?
Most freelancers can only bill around 50-70% of their total working hours. The remaining time is typically spent on admin tasks, marketing, invoicing, learning, client communication, and business development. For example, if you work 40 hours per week, you may realistically bill only 20-28 hours. To get a more accurate number, track your time for a few weeks and review how many hours are actually invoiced to clients.
What tax rate should I use?
In the US, self-employed individuals generally pay self-employment tax (about 15.3%) in addition to federal income tax, which ranges from roughly 10% to 37% depending on income. For many freelancers, a combined estimate of 25-35% is a reasonable starting point. Tax rates vary by location and situation, so this should be treated as a planning estimate. For accuracy, consult a tax professional who understands your specific circumstances.
Why include a profit margin?
A profit margin provides a buffer for unexpected expenses, slow periods, business investments, and long-term financial stability, including savings and retirement. Without a margin, you're only covering income and costs, leaving little room to grow or absorb risk. Including a margin also helps shift your mindset from simply trading time for money to building a sustainable business. A margin of 10-20% is a common starting point for many freelancers.
Is this hourly rate calculator free?
Yes. This hourly rate calculator is completely free and does not require a sign-up or payment. You can use it as often as needed to test different income goals, expense levels, or billable hour assumptions for your freelance or consulting business.
What if my calculated rate seems too high?
If your calculated rate feels high compared to what clients are currently paying, you have several options. You can adjust your income goal, reduce business expenses, or carefully increase billable hours without risking burnout. Another option is to specialize further or focus on higher-value services where higher rates are more justified. Remember, the calculated rate reflects what you need to charge to support your business, not just what the market feels comfortable with.
Should I charge different rates for different clients?
Yes, many freelancers charge different rates depending on project complexity, scope, urgency, client budget, or the value delivered. The rate calculated here should be treated as your baseline minimum. For high-value or time-sensitive projects, charging more is common. For long-term retainers or repeat clients, some freelancers choose to offer a small discount in exchange for stability.
Can I use this calculator if I don't bill hourly?
Yes. Even if you charge per project or per retainer, knowing your hourly rate helps you evaluate whether fixed prices are sustainable and aligned with your income goals.
How often should I revisit my hourly rate?
It's a good idea to review your hourly rate at least once a year, or whenever your expenses, workload, income goals, or tax situation change. Regular recalculations help keep your pricing realistic.
Is the calculated hourly rate a minimum or a target?
The calculated rate should be treated as a minimum baseline, not a ceiling. You can and often should charge more for specialized work, urgent deadlines, or high-impact projects.