Freelance Rate Calculator: What Should You Charge?
Calculate your minimum freelance hourly rate based on target income, overhead costs, and realistic billable hours. Stop undercharging.
Quick answer: Add your estimated overhead to the annual income target, then divide by billable hours. The overhead percentage is a markup on the target, not a deduction from revenue. Use your own numbers below.
This is a revenue target, not take-home pay. Include each expense once; unpaid time belongs in billable hours and weeks, not a second overhead allowance.
When to use this tool:
- Set minimum project rates
- Account for unpaid time
- Calculate safety buffer
How it's Calculated
- Effective Revenue = Target Salary + Overhead Buffer
- Required Hourly Rate = Effective Revenue / (Billable Hours per Week × Weeks Worked)
Key Assumptions
Defaults are example inputs. See methodology and corrections for how to check results, or report an issue.
- Assumes business expenses and extra taxes are handled via the strictly added overhead percentage.
- Day rate assumes a standard 8-hour billable day.
Actionable Insights
- A $100,000 target with 30% markup requires $130,000 revenue; at 25 hours × 46 weeks that is $113.04/hour.
- Reducing billable hours raises the required rate even when the annual budget stays unchanged.
Frequently Asked Questions
Time you expect clients to pay for, excluding unpaid sales and administration.
Your expected paid working weeks after unpaid leave and contract gaps.
Costs not already included in your income target. Express their annual total as a percentage of that target.
Use the contractor comparison. Keep benefits on one side of the comparison only, and do not add PTO to annual salary.
No. It is an editable example. Use your own costs.
Multiply by estimated billable hours, then check scope and payment terms. The estimate does not guarantee profitability.
Worked example: an annual budget
A $100,000 income target plus $30,000 of estimated overhead requires $130,000 revenue. At 1,150 billable hours, the rate is $113.04/hour and an eight-hour day is $904.35. The overhead must cover only items excluded from the target; personal taxes and replacement benefits need a consistent budget treatment.
Markup is different from a deduction
Adding 30% to $100,000 yields $130,000. Losing 30% of revenue and retaining $100,000 requires $142,857.14. The contractor comparison uses the second interpretation. Do not enter the same percentage in both tools and expect identical results.
Use billable hours and payment gaps to check your assumptions, then check cash runway before relying on future invoices.