How to Use This Calculator
- Enter your desired annual income after taxes
- Input your annual business expenses
- Specify your billable hours per week
- Set your weeks off per year
- Add your desired profit margin
- Input your estimated tax rate
- Choose between hourly or daily rate
- View your recommended rate and income projections
How Freelance Rate is Calculated
The freelance rate calculator uses these formulas to determine your optimal rate:
Working Weeks per Year = 52 - Weeks Off
This accounts for vacation time and holidays.
Billable Hours per Year = Billable Hours per Week × Working Weeks per Year
Total number of hours you can bill in a year.
Total Expenses = Business Expenses × (1 + Profit Margin)
Includes your desired profit margin on expenses.
Pre-Tax Income = Desired Income ÷ (1 - Tax Rate)
Calculates the income needed before taxes to achieve your desired after-tax income.
Hourly Rate = (Pre-Tax Income + Total Expenses) ÷ Billable Hours per Year
Your recommended hourly rate to achieve your income goals.
Daily Rate = Hourly Rate × 8
Assumes an 8-hour workday for daily rate calculations.
Utilization Rate = (Billable Hours per Week ÷ 40) × 100%
Shows how much of a standard 40-hour workweek is billable.