Free freelance rate calculator

How to use the freelance rate calculator

1. Enter the income you want to take home in a year, after tax.
2. Add your yearly business costs. Software, equipment, insurance, accounting and anything else the business pays for.
3. Enter your tax rate as a percentage of profit.
4. Enter your billable hours and working weeks. Count only time you can charge a client for.

How to work out your freelance rate

Start from the income you want and work backwards:

Hourly rate = (income ÷ (1 − tax rate) + business costs) ÷ billable hours a year

For example, to take home $70,000 with a 25% tax rate, you need $93,333 of profit before tax. Add $6,000 of costs and your target is $99,333 a year. At 25 billable hours a week for 46 weeks, that is 1,150 hours, so your rate is about $86.38 an hour, or about $432 a day.

Why billable hours matter most

Most freelancers can't bill every hour they work. Finding clients, writing proposals, invoicing and admin all take time. Many end up billing 20 to 30 hours in a 40 hour week. If you divide by 40 hours, your rate comes out too low and the year ends short.

Turning an hourly rate into a project price

• Estimate the hours, then add a buffer. Projects grow, and a 15% to 20% buffer covers the extra rounds of changes.
• Agree the scope in writing. A clear brief stops a fixed price from turning into unpaid work.
• Ask the right questions before you quote. Budget, deadline and what is included tell you whether the project fits.