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Freelance Hourly Rate Calculator

Annual income goal, billable hours per week, taxes and overhead — get the hourly rate you actually need to charge.

Take-home income goal (annual)

Business overhead (annual)

Effective tax rate

Billable hours %

Work hours per week

Weeks worked per year

Hourly rate to charge

$159.14

Annual revenue needed: $183,333
Billable hours per year: 1,152 hrs

What you entered

Income goal: $120,000Overhead: $12,000Tax rate: 28%Billable %: 60%

1
Total revenue needed (income + overhead, grossed up for tax)
($120,000 + $12,000) ÷ (1 − 28/100)= $183,333.33
2
Total working hours per year
40 × 48= 1920 hrs
3
Billable hours per year
1920 × 60/100= 1152 hrs
4
Hourly rate to charge
$183,333.33 ÷ 1152= $159.14

Result

Hourly rate to charge: $159.14

To take home $120,000 after $12,000 overhead and a 28% tax rate, charging $159.14/hour across 1,152 billable hours covers it.

Hourly rate needed to hit a target income

Your rate has to cover income, overheads, and tax, spread over only the hours you actually bill. Rows assume a 40-hour week across 46 working weeks, which is 1,840 hours before the billable share is applied.

Target income	Overheads	Tax rate	Billable share	Revenue needed	Billable hours	Hourly rate
$60,000	$10,000	25%	60%	$93,333	1,104	$84.54
$80,000	$12,000	30%	40%	$131,429	736	$178.57
$80,000	$12,000	30%	60%	$131,429	1,104	$119.05
$80,000	$12,000	30%	80%	$131,429	1,472	$89.29
$100,000	$15,000	30%	60%	$164,286	1,104	$148.81
$120,000	$20,000	35%	55%	$215,385	1,012	$212.83

The billable share is the lever people underestimate. The same $80,000 target needs $89 an hour at 80% billable and $179 at 40%, because admin, sales, and unpaid revisions all have to be paid for by the hours that do bill. Most freelancers land between 50% and 65%.

Billable ≠ total hours

Freelancers typically bill only 50–70% of their working hours. Admin, sales, learning, and downtime aren't billable. Build that into your rate or you'll burn out trying to hit a salary number.

Frequently asked questions

I want to earn $100,000/year freelancing — what should my hourly rate be?

Add 25-30% for self-employment tax, health insurance, and retirement ($130,000). Assume 48 work weeks (4 weeks off) × 25 billable hours/week (not 40!) = 1,200 billable hours. Rate = $130,000 / 1,200 = $108/hour. Most people undercharge because they use 2,080 hours (full-time), ignoring unbillable time.

Why can't I just divide my salary goal by 2,080 hours?

Because 2,080 assumes you bill every hour of a 40-hour week, 52 weeks a year. Freelancers spend 30-50% of their time on unpaid work: proposals, invoicing, marketing, admin, learning. You also pay self-employment taxes and buy your own benefits. The real billable base is closer to 1,000-1,400 hours.

How does the freelance rate compare to an equivalent salary?

A $100/hour freelance rate is NOT equivalent to a $200K salary. After self-employment tax (~15%), health insurance (~$6K-12K), retirement savings, and unpaid vacation, a $100/hour freelancer's take-home is closer to a $120K-140K salaried employee's. Use this calculator to work backward from your target take-home.