Freelancer Rate Calculator
Runs locallyInput stays in your browserFree, no sign-up
The most common pricing mistake freelancers make is dividing target annual income by 2,080 hours. That number comes from 40 hours a week, 52 weeks a year — it assumes every hour is billed, you never take a holiday, and you pay no tax and have no expenses. No freelancer works like that: finding clients, answering messages, revising proposals, sending invoices, and learning new tools all take time that nobody pays for, and tax and expenses come out of gross income before you see a cent. The naive rate looks friendly and leaves you far short of your target after a year of work.
The correct calculation works backwards. Start with the income you actually want to keep for the year, add back a year's business expenses — equipment, software subscriptions, self-paid social contributions, travel and phone — and you have the gross income you need before tax. Because tax is taken from gross income, that figure must also be divided by (1 − combined tax rate). Finally divide by the hours you can genuinely bill in a year: billable hours per week multiplied by working weeks per year. The result is your minimum hourly rate: take work below it and you cannot reach your target, however hard you work. That is also why raising your rate beats working longer hours: every hour added at a rate below the minimum still leaves the year short, while a rate above the minimum turns the same hours into a surplus.
An example makes the gap concrete. Target income 300,000, annual expenses 30,000, combined tax rate 20%, 25 billable hours a week, 46 working weeks a year: required gross income is 412,500, annual billable hours only 1,150, so the minimum rate is about 359 — while the naive shortcut gives 300,000 ÷ 2,080 ≈ 144, an underestimate of about 149%. The gap is not a lack of effort; the shortcut simply omits three real costs. This tool lays all three out so you can change each one and see which moves your rate most.
Two boundaries matter. The minimum rate is a floor, not a target price: add a premium for experience, project risk, slow seasons, and difficult clients. And the combined tax rate is an estimate — it varies widely by place and income structure, so use your real situation and check your local tax rules. Billable hours should come from your actual invoiced hours over recent weeks, not an ideal schedule. This tool does arithmetic only; it is not tax or financial advice.
How to use
- Enter the annual income you want to actually keep, after tax and expenses.
- Enter a year's business expenses: equipment, software, self-paid contributions, travel.
- Enter a combined tax rate, folding all taxes into one estimated percentage.
- Enter the hours per week you genuinely bill clients, and the weeks per year you work, excluding sales, admin, and holidays.
- Read the minimum hourly rate: below it, a year of work cannot reach your target.
FAQ
Why is dividing by 2,080 wrong?
2,080 assumes 40 billable hours a week, 52 weeks a year, with no tax and no expenses. Freelancers spend much of their time on sales, communication, and admin, so billable hours fall far short of 2,080.
How do I estimate the combined tax rate?
Total a year's taxes and divide by gross income. If unsure, try the common range for your area first, then adjust to your real figures.
Is the minimum rate my price?
It is a floor, not a target price. Add a premium for experience, project risk, and slow seasons.
How do I count billable hours per week?
Look back over recent weeks: hours actually invoiced, divided by weeks. Most freelancers land at 15–25 hours.
Do business expenses include my own social contributions?
Yes: anything spent to win and do the work counts, including self-paid contributions, equipment depreciation, and software subscriptions.