Freelancer Hourly Rate Calculator

How to calculate Freelancer Hourly Rate Calculator?

The calculator determines the hourly rate by spreading your yearly financial target across the hours you can realistically bill each year.

Key formula: hourly_rate = (desired_annual_salary + annual_business_expenses) / total_billable_hours_per_year

Using the Freelancer Hourly Rate Calculator calculator: an example

Example inputs: desired salary $60,000; annual expenses $5,000; billable hours 1,500.

Step-by-step calculation:

1. Set inputs: desired_annual_salary = $60,000; annual_business_expenses = $5,000; total_billable_hours_per_year = 1,500.
2. Sum salary and expenses: $60,000 + $5,000 = $65,000.
3. Divide by billable hours: $65,000 ÷ 1,500 = $43.33, so hourly_rate ≈ $43.33 per hour.
4. Round and adjust as needed for taxes, benefits, or market rates to set your final client rate.

Frequently Asked Questions

Should I include taxes and payroll in business expenses?

Yes. Include taxes, payroll, insurance, and other overhead in annual_business_expenses or increase your final rate to cover these costs.

What if my billable hours vary each month?

Use an annual estimate or a conservative billable-hours number. Lower estimated billable hours will increase the required hourly rate to meet your goals.

How do I account for non-billable time?

Estimate total available work hours, then calculate the realistic portion you can bill. Use billable hours in the denominator so your rate covers administrative and marketing time.

Should I round up my hourly rate?

Yes. Round to a simple number and consider client expectations and market rates when finalizing your published hourly rate.