Freelance Hourly Rate Calculator

Why your hourly rate is not your old salary divided by 2,080

Employees are paid for roughly 2,080 hours a year, but a freelancer can rarely bill all of them. Holidays, sick days, admin, marketing, invoicing, and gaps between projects all eat into the hours you can actually charge for. If you divide your target income by 2,080 you will badly underprice yourself.

On top of that, an employer silently pays for things you now cover yourself: payroll taxes, health insurance, paid time off, equipment, software, and a pension. Your rate has to absorb all of it and still leave the take-home you want.

How this calculator works

Start with the take-home income you want in a year. Add your annual business expenses (software, hardware, insurance, accountant, coworking). Add a margin for the tax you'll owe on your profit. Then divide by the hours you can realistically bill — your working weeks minus holiday and sick time, multiplied by the share of each week that is actually billable.

The result is the floor: the rate below which you are effectively paying to work. Most freelancers should price above the floor to leave room for growth and slow periods.

Where the billable percentage actually goes

The single number people get most wrong is the billable share, because the unbillable hours don't feel like work. They feel like the gaps between work. But they are the job: writing proposals that don't convert, scoping calls, chasing an invoice into its third reminder, updating your portfolio, doing your bookkeeping, and the dead Monday after a project ends before the next one starts.

Track it for one month before you trust a guess. Most people who measure for the first time find they are 10 to 15 points below what they assumed. A freelancer who plans for 80% billable and delivers 60% has priced their year 25% short — and will feel it as "I'm busy but somehow broke" rather than as a pricing error, which is why it goes uncorrected for years.

The percentage also moves with how you sell. Long retainers and repeat clients push it up, because you are not re-selling every month. A stream of small one-off projects pushes it down hard: every project carries the same fixed overhead of pitching, onboarding, and invoicing, no matter how few hours it contains.

When the floor is the wrong number to charge

This calculator gives you a floor, not a price. The floor tells you when to walk away. It does not tell you what the work is worth to the client, and those two numbers are often far apart.

If your work directly moves a client's revenue — a landing page that converts, a system that removes a salary's worth of manual work, a launch that hits its date — the value created can be many times your hourly cost, and hourly billing hands all of that upside to the client. That is the case for pricing the outcome instead of the hours.

The floor still matters in those conversations. It is what stops you from accepting a fixed price that quietly pays you less than working for someone else would, and it is how you sanity-check a project quote after you have set it: divide the fee by the hours you honestly expect to spend, and compare.