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Work out the hourly and day rate you need to charge so that, after covering your expenses and only billing part of your working week, you still hit your income goal. Many freelancers price from habit or guesswork; this works backwards from what you actually need to earn.
How the freelancer rate is calculated
- Weeks worked = 52 − weeks off
- Billable hours per week = hours worked per week × billable % ÷ 100
- Billable hours per year = billable hours per week × weeks worked
- Income needed per year = (monthly expenses + desired monthly profit) × 12, grossed up for tax if that option is on
- Hourly rate = income needed per year ÷ billable hours per year
- Day rate = hourly rate × (billable hours per week ÷ 5)
The key idea most simple rate calculators miss is the gap between hours worked and hours billed. A 40-hour week rarely means 40 billable hours: time goes on admin, invoicing, marketing, unpaid proposals and client communication. Pricing from your full working week instead of your billable week is one of the most common ways freelancers under-charge.
Worked example
Expenses of $2,000 a month, a desired profit of $1,000 a month, 40 hours worked a week at 70% billable, and 4 weeks off a year, with tax off:
- Weeks worked = 52 − 4 = 48
- Billable hours per week = 40 × 0.70 = 28
- Billable hours per year = 28 × 48 = 1,344
- Income needed per year = (2,000 + 1,000) × 12 = $36,000
- Hourly rate = 36,000 ÷ 1,344 ≈ $26.79
- Day rate = 26.79 × (28 ÷ 5) ≈ $150.00
Why billable percentage matters so much
Dropping from 100% billable to 70% billable doesn't just cut income by 30%; it raises the rate needed to hit the same target, because the same income has to come from fewer hours. A freelancer who only realizes later that half their week goes to unpaid work often finds they've been charging far below what they actually needed.
What to include in "expenses"
Include both business costs (software, equipment, a portion of a coworking space or home office, accounting fees, insurance) and your personal living costs, since as a freelancer your rate has to cover both. Leave out one-off purchases and keep this to your typical recurring monthly spend.
Turning this into a quote
For an hourly contract, quote the hourly rate. For a fixed-price project, estimate the hours it will realistically take (including revisions and client calls, not just "heads-down" time) and multiply by the hourly rate, or use the day rate for a clearer, round-number quote. If you'll be paid through a platform that takes a cut, check what you actually keep with the PayPal fee calculator, and use the break-even calculator to see how many billable hours or projects you need before you're covering costs at all.
Frequently asked questions
How do I calculate my freelance hourly rate?
Add your monthly expenses and desired profit, multiply by 12 for a yearly target, then divide by the number of hours you can realistically bill in a year, not the total hours you work.
Why is my billable percentage usually less than 100%?
Most freelancers spend real time on unpaid work: admin, invoicing, marketing, proposals, and client calls that don't directly bill. A common range is 60–80% billable, though it varies a lot by person and type of work.
Should I include personal living costs, not just business costs?
Yes. Unlike an employee, a freelancer's rate has to cover personal living costs as well as business costs, since there's no separate salary underneath it.
How do I turn an hourly rate into a day rate?
Multiply the hourly rate by the number of billable hours in a typical day. This calculator assumes a 5-day week, so it divides your weekly billable hours by 5.
Should I charge the same rate to every client?
This calculator gives you a baseline minimum to stay sustainable. Many freelancers charge more for rush work, scope-heavy projects, or clients who need more hand-holding, and may charge less for long-term, low-effort retainers.
Does this account for tax?
Only if you turn the tax option on and enter your rate. It then increases the income target so that, after tax, you're left with the amount you asked for. Tax rules vary by country and situation, so check your own obligations.
What if I work different hours each week?
Use a realistic average. If your hours vary a lot, try running the calculator with a lower-than-usual week to make sure your rate still works in quieter periods.