Freelancer Rate Calculator

Target: $100K, Tax: 30%, Unbillable: 20%, 48 weeks Gross needed: $142,857 Billable hours: 48 × 40 × 0.8 = 1,536 Hourly rate: $93/hr Day rate: $744

Setting a sustainable freelance hourly rate goes far beyond simply dividing your desired annual income by 2080, the standard number of working hours in a year for a full-time employee. As a freelancer, you are responsible for a multitude of costs and time commitments that an employee is not. This includes self-employment taxes, which can significantly reduce your take-home pay if not factored into your rate. Furthermore, a substantial portion of your work week is often dedicated to 'unbillable time,' activities such as marketing your services, administrative tasks, writing proposals, networking, and professional development. These essential business operations do not directly generate income but are vital for your success. Unlike employees who receive paid holidays and sick leave, freelancers must also account for vacation weeks and potential time off due to illness. These non-working periods mean you have fewer actual billable hours available throughout the year. Therefore, to achieve your target income, your hourly rate must be higher to compensate for these taxes, unbillable hours, and non-working weeks. This calculation helps ensure your rates are not just competitive, but also truly profitable and sustainable for your freelance business.