Free tool

Freelance hourly rate calculator

Turn the take-home you want into the hourly rate you should charge. Vacation, taxes, business expenses, and unbillable hours, all factored in.

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Most freelancers undercharge because they divide their target salary by 2,080 hours (40 hours x 52 weeks) and stop. The real divisor is much smaller: subtract weeks of vacation, public holidays, sick days, and the hours you spend on admin, sales, and unbilled work, then add back the taxes and business costs your old employer used to absorb. The output of that math is the rate you should charge to actually keep the salary you targeted.

You should charge

per billable hour

Gross revenue needed

Billable hours / year

Day rate (8 billable h)

Why the salary-divided-by-2080 trap costs you 30%

A $80k salary divided by 2,080 hours is $38 / hour. Charge that as a freelancer and you take home about $50k. Here is what gets eaten.

You will not bill 40 hours a week

Realistic billable utilization is 50 to 70% of working hours. The rest is sales, scoping, admin, invoicing, learning, and gaps between projects. Even at 70%, that is 28 billable hours per week, not 40.

Vacation and holidays are unpaid

An employee on $80k still gets paid during their two weeks off and ten holidays. As a freelancer, those weeks earn $0. You need a higher hourly to make up the gap.

Self-employment tax is real

In the US, the SE tax adds 15.3% on top of regular income tax (on top of state). For UK contractors, NI Class 4. For most countries, you owe both halves of payroll taxes that an employer used to split.

Business expenses come out first

Software, accountant, insurance, equipment, internet, phone, the office in your kitchen. $4-10k per year of pre-tax outflow that an employer used to absorb.

Use the rate downstream

Build a project quote

Itemize hours x your new rate, add contingency, send a real link.

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Send the invoice

Drop the rate into a free invoice with the right tax fields and a sendable link.

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Use the freelancer template

Pre-filled invoice template tuned to freelance line items and terms.

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Hourly rate FAQ

Is this calculator for freelancers or consultants?

Both. The math is identical: convert target take-home into a billable rate. Consultants typically have higher business expenses (E&O insurance, more travel) and a higher target take-home, so plug those in and the rate adjusts.

What billable percentage should I use?

Sixty-five percent is a good starting point for established freelancers. New freelancers (more sales time) should use 50%. Specialists with steady demand can use 75%. Anything above 80% is unsustainable long-term.

What is a typical effective tax rate for US freelancers?

For a single freelancer earning $80-150k take-home, plan on 25-32% combined federal income, state income, and self-employment tax. Higher earners and high-tax states (CA, NY) push above 35%.

Should I quote per hour or per project?

Per project is generally better for finished deliverables (a website, a brand identity) because it rewards efficiency and frames your value to the client. Per hour fits ongoing or open-scope work. The hourly rate is your floor either way: divide the project price by your honest hour estimate, and it should not undercut your hourly.

How do I know if my rate is too low for the market?

Two signs: every prospect says yes immediately, and you have to work more than 40 hours a week to hit your target. Either is a flag to raise the rate.

Should I show my hourly rate on the invoice?

If you bill hourly, yes. The line items show rate x hours, totaled. If you billed a flat project fee, do not break it back out into hours unless the contract requires it. Keep the project total clean.