Freelance hourly rate calculator
Find the lowest hourly and day rate that pays you the income you want after expenses, tax, holidays and the hours you cannot bill. Works in any currency.
Your numbers
Enter yearly figures. Everything updates as you type.
$106.38 / hour
- Day rate (8 h)$851.06
- Billable hours a year1,196
- Revenue needed a year$127,233.33
- … of which tax$26,666.67
- … of which expenses$9,000.00
- … of which profit buffer$11,566.67
- Average monthly revenue$10,602.78
This is the floor that covers your costs. Price above it when your experience, results or demand allow.
How the calculation works
The calculator works backwards from the money you want to keep. It adds what the business must pay out, then spreads the total over the hours you can realistically charge for.
Billable hours = (52 − weeks off) × hours per week × billable share
Hourly rate = revenue needed ÷ billable hours
Tax is applied to profit, not to expenses, because most tax systems let you deduct genuine business costs. The profit buffer is not a luxury: it is what carries you through a slow month, a late-paying client or a laptop that dies.
Worked examples in four markets
The same method, with typical inputs for a design or development freelancer. These are illustrations, not market rates.
| Market | Inputs | Billable hours | Minimum rate |
|---|---|---|---|
| United States | $80,000 take-home, $9,000 expenses, 25% tax, 10% buffer, 6 weeks off, 40 h/week, 65% billable | 1,196 | $106.38/h · $851 a day |
| United Kingdom | £50,000 take-home, £6,000 expenses, 30% tax, 10% buffer, 7 weeks off, 37.5 h/week, 60% billable | 1,013 | £84.12/h · £631 a day |
| United Arab Emirates | AED 300,000 take-home, AED 40,000 licence, visa and workspace, 0% tax, 15% buffer, 6 weeks off, 45 h/week, 65% billable | 1,346 | AED 290.60/h · AED 2,615 a day |
| Australia | A$95,000 take-home, A$10,000 expenses, 30% tax, 10% buffer, 6 weeks off, 38 h/week, 65% billable | 1,136 | A$141.07/h · A$1,072 a day |
Notice how much the billable share matters. Moving the US example from 65% to 50% billable lifts the minimum rate from $106 to about $138 an hour, without changing anything else.
Where freelancers usually go wrong
- Pricing from a salary. Dividing an old salary by 2,080 hours ignores holidays, expenses and unbilled time.
- Assuming every hour is billable. Proposals, invoicing, email and learning are real work that nobody pays for directly.
- Forgetting tax on profit. A rate that covers your take-home before tax leaves you short at the end of the year.
- Leaving out a buffer. One late client can wipe out a month’s margin if there is nothing set aside.
- Treating the floor as the price. The result is the lowest rate that works. Specialist skills, fast turnaround or proven results justify charging more.
From hourly rate to day rates, packages and retainers
Once you know your floor, you can price work the way clients prefer to buy it. A day rate is your hourly rate times the hours in your working day. A fixed project price is your best estimate of hours, times your rate, plus a margin for risk. A monthly retainer is the hours a client needs each month, plus time for management and small requests. The retainer pricing calculator does that last step, and the rate card template shows how to present the result.
Hourly rate questions
How do I calculate my freelance hourly rate?
Add the take-home income you want to your yearly business expenses, gross up the income for tax, add a profit buffer, then divide by the hours you can actually bill in a year. Billable hours are your working weeks times your weekly hours times the share of time you can charge for, usually 60 to 75%.
Why is my freelance rate so much higher than my old salary per hour?
An employee’s hourly pay does not have to cover holidays, sick days, equipment, software, insurance, pension, unbilled admin or quiet months. A freelancer’s rate does. Dividing a salary by 2,080 hours (40 × 52) understates what a freelancer needs by a wide margin.
What billable percentage should I use?
Most freelancers bill 60 to 75% of their working hours. The rest goes on sales calls, proposals, invoicing, email and learning. If you are new or building a pipeline, use the lower end.
Should I charge hourly or by the project?
Hourly suits open-ended or advisory work. Fixed project prices suit well-defined scopes and reward you for working efficiently. Either way, know your hourly floor first, so a fixed price still covers your costs.
What tax rate should I enter?
Enter a rough combined rate on profit: income tax plus any self-employment or social contributions. In the UAE many freelancers pay no personal income tax, though business profits above a threshold can fall under corporate tax. In the US, the UK, Australia, Canada and India, an accountant can give you a realistic figure for your situation.
Does this include VAT, GST or sales tax?
No. Sales taxes such as VAT, GST or US sales tax are charged on top of your rate when you are registered or required to collect them. They are not income, so leave them out of this calculation.
How often should I raise my rate?
Review it at least once a year and whenever your costs, demand or skills change. Raising rates for new clients first, and giving existing clients notice, keeps relationships intact.
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Updated September 2026. General information, not financial, tax or legal advice. Check the rules where you work.