Freelance Hourly Rate Calculator
A rate worked out from billable hours, costs and tax, rather than a salary divided by 2,080 hours that has you working weekends by March.
Take-home target £60,000.00
Business costs £9,000.00
Tax and contributions 30%
Working weeks 46
Hours a week 35
Working hours a year 1,610
Billable share 65%
Billable hours a year 1,047
Revenue needed £94,714.29
Hourly rate £90.51
Day rate at 7 hours £633.54
If every hour were billable £58.83
The gap between £90.51 and £58.83 is the unbillable third of the week:
admin, sales, invoicing, and the work that wins the next job. It is real
work and the rate has to carry it.
Revenue of £94,714.29 is what produces £60,000.00 take-home after 30%
tax and £9,000.00 of costs. Check it against what you actually invoiced
last year: the difference is usually the billable share, not the rate.
Output is valid and updates as you type.
Fix the highlighted fields to update the output.
The wrong way to set a freelance rate is to take the salary you want and divide by 2,080 hours. A freelancer does not bill 2,080 hours. Holidays, illness, admin, invoicing, and the work of finding the next job take a third to a half of the year, and the costs an employer used to carry are now yours.
So this works the other way: from the money you need, through tax and costs, to the revenue required, divided by the hours you can actually bill.
How to use
- Put in what you need to take home for the year, after tax.
- Add your business costs: software, hardware, insurance, accountant, coworking, training.
- Set your tax and contributions as a rough percentage.
- Set the working weeks, the hours a week, and the share of those hours a client pays for. That last number is the one that moves the rate most.
Example
Sixty thousand take-home, nine thousand of costs, 46 weeks, 35 hours, 65 percent billable, 30 percent tax:
Working hours a year 1,610
Billable share 65%
Billable hours a year 1,047
Revenue needed £94,714.29
Hourly rate £90.51
Day rate at 7 hours £633.54
If every hour were billable £58.83The last line is the one worth sitting with. If every hour of your week were billable, 58.83 would do it. Because a third of the week is not billable, the rate has to be 90.51. That difference is not padding: it is admin, sales, invoicing and the unpaid work that produces the next contract, and the rate has to carry it.
Pitfalls
The billable share is lower than you think. If you have never measured it, assume 60 to 65 percent and be pleased if you are wrong. Measuring it for a month is the single most useful thing you can do to your pricing.
Working weeks are not 52. Take out holidays, public holidays and the weeks you will be ill or between contracts. Forty-four to forty-seven is the honest range, and pretending otherwise is how people end up working through August.
An employee’s salary is not the comparison. An employer also pays employer contributions, pension, equipment, software, holiday and sick pay. A freelance rate covering the same life is usually 1.5 to 2 times the hourly equivalent of the salary.
Tax is a rough figure here and that is fine. Getting the tax percentage wrong by five points moves the rate by a few percent. Getting the billable share wrong by fifteen points moves it by a quarter.
A day rate is not eight times the hourly rate. It is the hours you will actually work in that day, which is usually six or seven of productive time. The output uses seven.
Compatibility
Arithmetic in the browser: nothing is uploaded, nothing is stored, and the share link carries the figures, which makes it easy to compare scenarios with a partner or an accountant.
The tax figure is applied as a flat percentage of the revenue needed to reach your take-home. Real tax is banded and depends on your country and structure, so treat the result as the starting point for a conversation with an accountant rather than as a filing.