Freelance Hourly Rate Calculator
Work out the hourly rate a freelancer must charge to hit a target take-home income, after business expenses, given realistic billable hours per year.
How to use this tool
- Enter the annual income you want the business to pay you.
- Add your yearly business expenses (software, insurance, equipment, fees).
- Enter your realistic billable hours for the year — far below total worked hours.
- Read the hourly rate plus the equivalent day and weekly rates.
Find the hourly rate you need to charge as a freelancer. Enter the income you want to take, your annual business costs, and the hours you can realistically bill — the calculator turns that into an hourly, daily and weekly rate.
Formula
Required hourly rate = (Target income + Business expenses) ÷ Billable hours per year
Day rate = Hourly rate × Hours in a working day
Weekly rate = Hourly rate × Billable hours in a week
Billable hours are the hours you actually invoice — always well below the hours you work, because admin, sales, breaks and time off are not billable.
How it works
A freelance hourly rate is not your old salary divided by 2,080 hours. It must cover both the income you want to keep and every cost of running the business, and it must be earned across only the hours you can actually bill. This calculator adds your target income and annual business expenses to get the revenue you must bill, then divides by your realistic billable hours for the year.
The single biggest mistake is overstating billable hours. A full-time freelancer might be available 2,000 hours a year but bill only 1,000–1,400 of them, because the rest goes to finding clients, admin, invoicing, learning and unpaid revisions. Use a conservative billable figure: the lower it is, the higher the rate you need. This tool deliberately leaves taxes out of the target-income field — if you want the rate to also fund a tax reserve, raise your target income accordingly or pair it with a take-home calculator.
Prepared by the AbraCalc Freelance Desk for planning and education. Rates also depend on your market, skill and positioning; treat the output as a floor, not a ceiling.
Worked example
$80,000 target, $10,000 expenses, 1,200 billable hours
- Add expenses to your target income: 80,000 + 10,000 = 90,000.
- Divide by billable hours: 90,000 ÷ 1,200 = 75.
- Day rate (8h): 75 × 8 = 600.
- Weekly rate (40h): 75 × 40 = 3,000.
Required hourly rate = $75.00
Required hourly rate by billable hours (target $80,000 + $10,000 expenses = $90,000)
| Billable hours/year | Required hourly rate | Equivalent day rate (8h) |
|---|---|---|
| 800 | $112.50 | $900.00 |
| 1,000 | $90.00 | $720.00 |
| 1,200 | $75.00 | $600.00 |
| 1,400 | $64.29 | $514.29 |
| 1,600 | $56.25 | $450.00 |
| 1,800 | $50.00 | $400.00 |
| 2,000 | $45.00 | $360.00 |
Key terms
- Billable hours
- Hours you actually invoice clients for, as opposed to total hours worked.
- Utilization
- The share of your available hours that are billable; lower utilization means a higher rate is needed.
- Business expenses
- Recurring costs of operating — software, insurance, equipment, fees — that the rate must also recover.
- Day rate
- An hourly rate packaged per working day, common for on-site or fixed-schedule engagements.
Frequently asked questions
- Why can't I just divide my old salary by 2,080?
- Because that ignores business expenses and unbillable time. Freelancers carry their own software, insurance and equipment costs, and can only invoice a fraction of the hours they work, so the rate has to be markedly higher than the salaried equivalent.
- How many billable hours should I assume?
- Be conservative. Even busy full-time freelancers bill roughly 1,000–1,400 hours a year once you remove sales, admin, breaks and time off. Using a lower number raises the rate, which protects you when work is slow.
- Does this include taxes?
- No. The target income is the pre-tax amount you want the business to generate. If you want the rate to also fund a tax reserve, increase your target income or use a tax set-aside calculator alongside it.