Freelance Rate Calculator

Q: How do I calculate my freelance hourly rate?

Gross up take-home pay for tax, add business costs, divide by billable hours per year.

Q: Why is my freelance rate so much higher than a salary?

You pay your own tax, pension, equipment and holidays and can't bill every hour.

Q: How often should I raise my rates?

At least once a year, and whenever you're fully booked or costs rise.

Set a rate that actually pays the bills. Start from the income you want to take home, add your business costs and tax, allow for holidays and the hours you can’t bill, and the calculator gives the hourly, day and monthly rate you need to charge.

Hourly & day rateTax & expenses includedBillable timeLast updated: November 3, 2026

Calculate your freelance rate

Target take-home income (per year)

What you want to keep after tax

Business expenses (per year)

Software, equipment, insurance, accountant, co-working…

Effective tax rate on profit

Income tax plus self-employed social security

Weeks off per year

weeks

Holidays, public holidays and sick days

Working hours per week

hours

Billable share of time

Most freelancers bill 50–75% of their hours

Safety buffer

For quiet months and late payers

Currency

How your rate is worked out

1. Revenue you need

Pre-tax profit = take-home ÷ (1 − tax%) · Revenue = (pre-tax profit + expenses) × (1 + buffer%)

Business expenses are normally deducted before tax, so they are added after grossing up your take-home pay.

2. Hours you can bill

Billable hours = (52 − weeks off) × hours per week × billable%

3. Your rate

Hourly rate = revenue ÷ billable hours · Day rate = hourly × (weekly hours ÷ 5)

Worked example

Take-home 50,000 at 25% tax → pre-tax profit 66,667
+ 8,000 expenses = 74,667; + 10% buffer = 82,133 revenue needed
Billable hours = 46 weeks × 40 × 65% = 1,196
Hourly rate = 82,133 ÷ 1,196 = 68.67; day rate (8 h) = 549.39

Why billable time matters so much

Employees are paid for every working hour. Freelancers are only paid for the hours a client pays for. Marketing, proposals, invoicing, learning and admin all take time, so a full-time freelancer typically bills 25–30 hours of a 40-hour week. Dropping from 75% to 50% billable raises the rate you need by half.

Hourly, day or project pricing?

Model	Good for	Watch out for
Hourly	Open-ended or changing work	Clients watching the clock
Day rate	On-site or embedded contracts	Long days for the same pay
Fixed project price	Well-defined scope	Scope creep; estimate hours × your rate + 20%

Frequently asked questions

How do I calculate my freelance hourly rate?

Add your desired take-home pay grossed up for tax to your annual business costs, then divide by the hours you can realistically bill in a year.

Why is my freelance rate so much higher than a salary?

You pay your own tax, pension, equipment and holidays, and you can’t bill every hour. A freelancer often needs 1.5–2 times the equivalent employee hourly wage.

How often should I raise my rates?

Review them at least once a year, and whenever you’re fully booked or your costs rise.

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Results are estimates. Tax for the self-employed depends on your country and circumstances; ask an accountant.