Calculate the right freelance hourly rate based on your target income, expenses, billable hours, and taxes. Stop undercharging. Free hourly rate calculator, no signup.
Add your target annual income + annual business expenses + estimated taxes (25-35%). Divide by your annual billable hours (weekly billable hours x 48 weeks). This gives your break-even rate. Add 20-30% for profit margin and negotiation buffer.
Freelancers pay the full 15.3% self-employment tax (employers cover half for employees), plus their own health insurance, retirement savings, equipment, software, and have no paid vacation. A $100/hour freelance rate often equates to $55-65/hour in equivalent salaried compensation.
Most freelancers bill 50-65% of their total working hours. The rest goes to admin, sales, proposal writing, learning, and non-billable tasks. Using 50% (20 billable hours in a 40-hour week) is a safe planning assumption for new freelancers.
Plan for 48 billable weeks at most. This accounts for 2 weeks vacation, 1 week sick days, and 1 week for slow periods or transitions. Many experienced freelancers use 45 weeks for conservative estimates.
Yes. Platforms like Upwork or Fiverr charge 10-20% service fees, so raise your rate by that amount to net the same income. Direct clients need no adjustment. Urgent or specialized work can command a 25-50% premium over your standard rate.
Raise your rate when: you are fully booked for 2+ consecutive months, prospects consistently accept without negotiation, your expenses have increased, you have gained significant new skills or experience, or market rates in your niche have risen. A 10-20% annual rate increase is standard for established freelancers.