Freelance Rate Calculator
Work out the hourly and day rate you should charge as a freelancer. Enter your target income, expenses, billable hours and profit margin for an instant rate.
Updated 2026-06-14 · Free · No sign-up · Runs privately in your browser
Show the formula & steps
How the Freelance Rate Calculator Works
Setting your rate too low is the most common freelancing mistake. This calculator works backward from the income you want. Enter your target annual income, business expenses, billable hours per week, working weeks per year, a profit margin, and hours per working day. It returns the total revenue you need, your hourly rate, and your day rate.
The Formula
Revenue needed = (target income + expenses) ÷ (1 − profit margin) Annual billable hours = working weeks × billable hours per week Hourly rate = revenue needed ÷ annual billable hours Day rate = hourly rate × hours per working day
Dividing by (1 − profit margin) marks up your costs so the business earns a true profit rather than just covering expenses. Because only a fraction of your time is billable, the billable-hours figure is the key lever that keeps your rate realistic.
Worked Example
Suppose you want $80,000 income, have $12,000 in expenses, bill 25 hours/week for 46 weeks, want a 15% profit margin, and work 8 hours/day:
- Revenue needed = (80,000 + 12,000) ÷ (1 − 0.15) = 92,000 ÷ 0.85 ≈ $108,235
- Annual billable hours = 46 × 25 = 1,150 hours
- Hourly rate = 108,235 ÷ 1,150 ≈ $94.12/hour
- Day rate = 94.12 × 8 ≈ $753/day
Why a Proper Rate Matters
Pricing on intuition usually leaves money on the table. A structured rate lets you:
- Cover the full cost of doing business — software, hardware, insurance, and downtime between clients.
- Account for non-billable time — you cannot bill 40 hours a week, so your rate must compress a full income into fewer paid hours.
- Quote with confidence — knowing both an hourly and a day rate makes proposals and negotiations easier.
| Target income | Billable hrs/yr | Profit | Hourly rate |
|---|---|---|---|
| $60,000 + $8k exp | 1,150 | 10% | ≈ $65.70 |
| $80,000 + $12k exp | 1,150 | 15% | ≈ $94.12 |
| $100,000 + $15k exp | 1,200 | 20% | ≈ $119.79 |
Frequently asked questions
How do I calculate my freelance hourly rate?+
Add your target income and annual business expenses, divide by one minus your profit margin to get the revenue you need, then divide that by your yearly billable hours (working weeks times billable hours per week). The result is the hourly rate that hits your income goal.
Why are billable hours lower than a full-time schedule?+
Freelancers spend a large share of their time on unpaid work like marketing, admin, invoicing and learning. A common rule is that only 50-60% of working hours are billable, so 25 billable hours a week is realistic even for someone working 40-plus hours total.
Should I include taxes in my freelance rate?+
Yes. Treat self-employment and income taxes as part of your target income or as an expense, because no employer withholds them for you. A simple approach is to set your target income to your desired take-home amount plus your estimated tax bill.
What profit margin should a freelancer build in?+
A profit margin of 10-20% above costs gives you a buffer for slow periods, equipment upgrades, and reinvestment in your business. Without a margin you only break even, leaving nothing for growth or unexpected gaps between clients.
How do I turn an hourly rate into a day rate?+
Multiply your hourly rate by the number of hours in a working day. At an hourly rate of $87 and an 8-hour day, your day rate is 87 times 8, which is about $696 per day, though many freelancers round day rates to a clean figure for proposals.