Freelance Hourly Rate Calculator
Enter the income you want, your business expenses, and the hours you can bill to find the lowest hourly rate that covers them — with an optional buffer and tax set-aside.
Freelance Hourly Rate Calculator calculates in your browser.
Set a freelance hourly rate from your numbers
A freelance rate has to pay for more than your time: business expenses, unpaid holidays, the hours spent finding clients and sending invoices, a cushion for slow months, and tax. This calculator adds up the income you want, your expenses, and an optional buffer and tax set-aside, then divides by the hours you can realistically bill. It shows each part per billable hour so you can see where the rate comes from. It is for new and established freelancers, consultants, and contractors setting or reviewing a rate. To start from an employee salary instead, use the Salary-to-Contract Rate Calculator.
How to use the Freelance Hourly Rate Calculator
- Choose whether your income goal is before tax or take-home; for take-home, enter a tax rate to set aside.
- Enter the yearly income you want, and your yearly business expenses.
- Optionally add a buffer for savings or profit.
- Enter your working weeks a year and your billable hours — directly, or as hours worked × utilization.
- Read the minimum hourly rate, the revenue it needs, and what each part costs per billable hour.
The formula
Pre-tax income = take-home income ÷ (1 − tax set-aside rate)
Revenue needed = (pre-tax income + business expenses) × (1 + buffer)
Billable hours = working weeks × billable hours a week
Minimum hourly rate = revenue needed ÷ billable hours, rounded up to the cent
Unless shown otherwise, examples use 46 working weeks of 25 billable hours. The billable hours matter as much as the income. The last row bills 60% of a 40-hour week for 46 weeks — 1,104 hours — so $132,000 of revenue needs almost $120 an hour.
| Income goal | Expenses | Buffer | Billable hours | Minimum rate |
|---|---|---|---|---|
| $80,000 before tax | $12,000 | — | 1,150 hours | $80.00/hr |
| $80,000 before tax | $12,000 | 10% | 1,150 hours | $88.00/hr |
| $60,000 take-home, 25% tax | $12,000 | — | 1,150 hours | $80.00/hr |
| $75,000 before tax | — | — | 1,440 hours | $52.09/hr |
| $100,000 before tax | $20,000 | 10% | 1,104 hours | $119.57/hr |
Calculated on your device
- The calculation runs in your browser as you type; nothing is sent to a server.
- Your income, expenses, rates, and results are not sent to Looty Tools or stored.
- The calculator area is masked from session-recording analytics, so what you enter isn’t captured in recordings.
Limitations
- This is the lowest rate that covers the income, expenses, and buffer you enter at the billable hours you expect — not a market rate, and not a promise of profit. If you bill fewer hours, or clients pay late or not at all, the same rate brings in less. The tax figure is a simple set-aside at the rate you enter, not a tax calculation.
- Tax is a single set-aside rate you choose, applied to income only. Self-employment tax rules, deductions, and the tax on the buffer itself are not modelled.
- One rate for all billable hours. Day rates, retainers, and project pricing are not calculated, though a day rate can be compared with the hourly figure.
- Up to 52 working weeks and 168 hours a week; the rate is rounded up to the next cent so it never falls short.
Related calculators
- Annual Work Hours CalculatorAdd up work hours across a year from the schedule you enter.
- Billable Hours Target CalculatorFind the billable hours needed to hit a target you set.
- Salary-to-Contract Rate CalculatorTurn a salary into a contract rate using the assumptions you enter.
Guides
- Revenue vs Take-HomeRevenue, income after expenses, and take-home pay are three different numbers. Follow $150,000 of revenue down to take-home pay, and work back up from the take-home pay you want.
- Freelance Hourly RateThe freelance hourly rate formula, a step-by-step example, why dividing by 2,080 hours underprices you, and how billable hours change the minimum rate.
- Freelance ExpensesThe business costs a freelance rate has to cover that an employer used to pay: an example $12,000 budget, what each line adds per billable hour, and how to spread big purchases.
- Freelance Tax Set-AsideHow to gross up a take-home income goal for tax, why multiplying by 1.25 comes up short, a table of set-aside rates, and practical ways to put the money aside. Not tax advice.
- Margin vs MarkupA 20% margin and a 20% markup give different contract rates. The two formulas, a comparison table at 10% to 50%, how to convert between them, and which one a quote is using.
Freelance Hourly Rate Calculator FAQ
- How do I calculate my freelance hourly rate?
- Add the income you want to your business expenses, then divide by the hours you can bill in a year. $80,000 of income plus $12,000 of expenses over 46 weeks of 25 billable hours (1,150 hours) is a minimum of $80.00 an hour.
- Why use billable hours instead of 40 hours a week?
- Freelancers spend part of every week on admin, invoicing, and finding work, and take unpaid holidays. Dividing by 2,080 hours would give $44.23 an hour for the same $92,000 — barely half what the 1,150 hours you can actually bill require.
- How does the calculator handle taxes?
- Only as a simple set-aside. Choose a take-home income goal and enter one combined tax rate; the pre-tax income is take-home ÷ (1 − rate). $60,000 take-home at 25% needs $80,000 before tax. It is not a tax calculation — real tax depends on where you live, deductions, and how your business is set up.
- What is the buffer for?
- Savings, slow months, late payers, and profit. A 10% buffer on $92,000 of income and expenses adds $9,200, raising the minimum rate from $80.00 to $88.00 an hour.
- Is the calculated rate what I should charge?
- It is a floor — the least you can charge and still meet the figures you entered. What clients in your field pay may be higher or lower, and if you bill fewer hours than planned, the same rate brings in less.
- Are the amounts I enter sent anywhere?
- No. The calculation runs in your browser as you type. The amounts, rates, and results are not sent to Looty Tools or stored, and the calculator area is masked from session-recording analytics. Refreshing the page clears it.
