Freelance Hourly Rate Calculator United States

Freelancers who guess what to charge usually charge too little. This freelance hourly rate calculator works backward from the income you want, the cost of running your business and the hours you can realistically bill, and returns the hourly rate that gets you there. That rate is almost always higher than the hourly equivalent of a salaried job paying the same amount, because freelancers bill only part of their week and carry their own costs.

Why a freelance rate is not salary divided by hours

An employee is paid for a full 40-hour week, gets benefits and has expenses covered. A freelancer is paid only for billable hours, the time a client agrees to pay for, while admin, marketing, sales calls, invoicing and training are unpaid. Freelancers also pay for their own software, equipment, insurance and workspace. Dividing a target salary by 2,080 hours ignores all of that and leaves you short, so the calculator spreads the revenue you need over the hours you can actually charge for.

How the calculation works

The calculator adds your target take-home income to your annual business expenses for the revenue you need: keeping $80,000 with $10,000 of costs means bringing in $90,000. It multiplies the hours you can bill each week by the weeks you work for your annual billable hours, then divides the revenue by those hours. No tax tables or fixed rates are involved, so the result does not go out of date.

Choosing a realistic billable-hours figure

Billable hours have the largest effect, and most people are too optimistic about them. Between finding clients, email, proposals, bookkeeping and keeping skills current, many established freelancers bill only 20 to 30 hours of a full week. If you plan on 40 and bill 25, your income falls far short. Enter what you can honestly invoice, and reduce the weeks worked to allow for vacation, sick days and slow periods.

Expenses and unpaid time off

Business expenses leave your account in small amounts throughout the year, so add them up: subscriptions, hardware, professional insurance, accounting fees, a share of rent or utilities, and any subcontractors. The weeks-worked input covers unpaid time off; a freelancer taking four weeks of vacation and expecting some downtime might plan on 46 to 48 working weeks.

A worked example

Suppose you want to take home $80,000, expect $10,000 in business expenses, can bill 25 hours a week and plan to work 48 weeks a year. You need $90,000 of revenue over 1,200 billable hours, an hourly rate of $75. Assuming 40 billable hours for 52 weeks would spread the same $90,000 over 2,080 hours and suggest just over $43 an hour, far short once the unbillable hours are counted.

Assumptions and limitations

This is a planning tool, not a tax or accounting engine. It treats your target income as the amount left after expenses but before income tax and self-employment tax, so raise the target to cover expected tax or use a self-employment tax calculator. It assumes every billable hour is charged at the same rate and does not model project pricing, retainers, rush fees or discounts. The result is only as good as the billable hours and weeks you enter.

About This Freelance Rate Calculator

Use this freelance rate calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.