Work out what to charge per hour based on your income goals, expenses, and billable time
This is a free hourly rate calculator for freelancers, contractors, sole traders, and small business owners. Enter the income you want to take home, your business expenses, the weeks you take off, your working hours, and the share of those hours you can actually bill. It returns the hourly rate you need to charge and a matching day rate. There is nothing to sign up for and nothing to install. If you searched for a freelance rate calculator, a self-employed hourly rate calculator, a contractor day rate calculator, or "how much should I charge per hour", this is the tool.
The same formula works whether you are a freelancer, a sole trader, an independent contractor, or a one-person service business. The rate is the total revenue you need in a year divided by the hours you can bill, not the hours in a work week. Only your income target, expenses, and hours change.
Enter the income you want, your software and hardware costs as expenses, and a billable utilization that reflects how much time goes on client work versus finding clients, admin, and revisions you do not bill for.
Writers often price per word or per article, but working out an hourly rate first shows whether that price pays. Enter your target, then compare the rate with what you earn per hour on a typical piece.
Consultants have lower billable utilization than they expect, because sales, proposals, and preparation take real time. Try 50 to 60% and see how the rate changes.
Enter your expenses for tools and subscriptions, your weeks off, and a utilization that reflects gaps between clients. The daily rate helps if a client wants to book you for a full day.
Shoot time is only part of the job. Editing, delivery, travel, and admin all need paying for. Set your utilization low enough to include them, and add equipment and insurance as expenses.
Only the hours with a paying student or client count as billable. Enter the hours you are available each week and the share you can realistically fill.
Include vehicle, tools, insurance, and materials handling as expenses, and count travel and quoting time as non-billable. The result is the labour rate you need to charge to cover the business and your income.
The table below uses 4 weeks off, a 40-hour week, 70% billable utilization, and expenses equal to 10% of income, with no tax gross-up. Use it as a rough guide, then enter your own numbers.
| Take-home income | Business expenses | Revenue needed | Hourly rate |
|---|---|---|---|
| 30,000 | 3,000 | 33,000 | 24.55 |
| 40,000 | 4,000 | 44,000 | 32.74 |
| 60,000 | 6,000 | 66,000 | 49.11 |
| 80,000 | 8,000 | 88,000 | 65.48 |
| 100,000 | 10,000 | 110,000 | 81.85 |
Billable utilization has a bigger effect on your rate than most people expect. With the same 66,000 of revenue needed, 4 weeks off, and a 40-hour week, the rate changes like this:
| Billable utilization | Billable hours a year | Hourly rate |
|---|---|---|
| 50% | 960 | 68.75 |
| 60% | 1,152 | 57.29 |
| 70% | 1,344 | 49.11 |
| 80% | 1,536 | 42.97 |
| 90% | 1,728 | 38.19 |
| Change to the defaults | Billable hours a year | Hourly rate for 66,000 revenue |
|---|---|---|
| 2 weeks off | 1,400 | 47.14 |
| 4 weeks off (default) | 1,344 | 49.11 |
| 6 weeks off | 1,288 | 51.24 |
| 8 weeks off | 1,232 | 53.57 |
| 20-hour week, 4 weeks off | 672 | 98.21 |
A common use is finding the freelance rate that matches a salary. Enter the salary you want to replace as your desired annual income, add your expected expenses, and set your weeks off and utilization. Freelancers need a higher hourly figure than an employee on the same salary, because they pay for their own holidays, tools, and unbilled time. To go the other way and gross up for tax, open the advanced tax section: 60,000 of take-home income at a 25% tax rate needs 80,000 before tax, which with 6,000 of expenses gives a rate of 63.99.
The calculator also shows a day rate for a 5-day week, based on your billable hours per week. It is not simply your hourly rate multiplied by eight, because you will not bill every hour of a working day. See the difference between an hourly rate and a day rate for how to choose one for a given client. With the default numbers, an hourly rate of 49.11 gives a day rate of 275.
The calculator works in any currency and any tax system, because it only needs your numbers. Pick your currency symbol, enter your target income and expenses in that currency, and set your tax rate if you want the rate to cover tax. It works the same for a US freelancer, a UK sole trader, a Canadian contractor, an Australian sole trader, a South African freelancer, or anyone else who is self-employed.
Once you know your rate, put it to work. Add it as the unit price on a quotation with the hours as the quantity, then bill the job with the invoice generator. If you price by project, check the profit with the profit margin and markup calculator. When you are ready to price a piece of work, read how to quote a freelance project.
Yes. This freelance hourly rate calculator is free and needs no account, no login, and no email address.
Enough to cover your target income, your business expenses, your time off, and your unbilled time. Enter those numbers into the calculator and it gives you the hourly rate that does.
We add your desired income and business expenses to get the revenue you need, then divide it by your billable hours per year, which accounts for weeks off and how much of your working time is billable.
Billable utilization is the percentage of your working hours that you can actually bill to clients, after admin, marketing, and other unpaid work. Most freelancers are billable 60 to 80% of their working time.
With 4 weeks off, a 40-hour week, and 70% utilization you have 1,344 billable hours a year. Change any of the three and the number changes.
Yes. It multiplies your hourly rate by your billable hours per day and shows the day rate alongside the hourly figure.
Yes. Sole traders, contractors, and small service businesses use the same formula as freelancers: desired income plus expenses, divided by billable hours.
Yes. Open the advanced tax section and enter your tax rate. The calculator grosses your income target up so what you keep after tax matches your goal.
Yes. Enter your annual business expenses and they are added to your income target before the rate is calculated.
Yes. Enter the total weeks off per year and the calculator removes them from your billable weeks.
With 6,000 of expenses, 4 weeks off, a 40-hour week, and 70% billable utilization, you need about 49.11 an hour. Change any input and the answer updates.
Enter your salary as your desired annual income, add your expected expenses, and set your weeks off and utilization. The hourly rate will be higher than an employee's hourly pay, because you cover your own time off and unbilled hours.
Yes. Change the currency symbol and the results are shown in your currency.
Yes. The calculator works in your browser on iPhone and Android, with nothing to install.
Yes. Recalculate at least once a year and whenever your costs change, and quote new clients your current number, not last year's.