Freelancer Rate Calculator
Calculate your ideal hourly, day, and monthly rates. Accounts for taxes, expenses, vacation, and non-billable hours.
Software, insurance, office, equipment
Admin, marketing, sales
How Freelancer Rates Are Calculated
Set Income Goals
Enter your target annual income, business expenses, and tax rates.
Define Your Time
Account for vacation, sick days, and non-billable hours like admin and sales.
Get Your Rates
See hourly, daily, weekly, and monthly rates plus utilization scenarios.
Rate Calculation Formulas
Total Needed:
Total = Target Income + Expenses + TaxesBillable Hours:
Billable = (Hours/Day x 5 - Non-Billable) x Work WeeksHourly Rate:
Hourly Rate = Total Needed / Total Billable HoursExample: Freelance Developer Rate
A freelance developer wants $100,000 take-home income with $15,000 in annual business expenses. Thinking about scaling? Read our guide on transitioning from freelancer to agency.
| Parameter | Value |
|---|---|
| Target income | $100,000 |
| Business expenses | $15,000 |
| Self-employment tax (15.3%) | $15,300 |
| Income tax (25%) | $25,000 |
| Vacation weeks | 3 weeks |
| Non-billable hours/week | 10 hours |
| Total needed annually | $155,300 |
Calculated Rates
At 75% utilization, this developer needs to charge at least $106/hr to hit their income goal. Wondering when to bring on help? See our guide on when to hire your first employee.
Who This Calculator Is For
Freelancers & Contractors
Set rates that cover all your costs, taxes, and time off while hitting income targets.
Consultants
Price your services accurately by accounting for non-billable time and overhead.
Agency Owners
Calculate minimum billable rates for new hires and subcontractors.
Frequently Asked Questions
How do I calculate my freelance hourly rate?
Add your target income, business expenses, and taxes to get your total needed. Then divide by your total annual billable hours (accounting for vacation, sick days, and non-billable admin time). Most freelancers underestimate non-billable hours, which leads to undercharging.
What is a good utilization rate for freelancers?
Most freelancers achieve 60-75% utilization, meaning 60-75% of their working hours are billable. The rest goes to marketing, sales, admin, invoicing, and professional development. New freelancers should plan for 50-60% utilization and increase rates accordingly.
What taxes do freelancers need to account for?
In the US, freelancers pay self-employment tax (15.3% for Social Security and Medicare) plus federal and state income tax. The self-employment tax alone adds roughly $15,300 on $100,000 of income. Always factor both taxes into your rate calculation. Compare with employment costs using the contractor vs employee calculator.
Should I charge hourly, daily, or project-based rates?
It depends on the work type. Hourly works for ongoing support and uncertain scope. Day rates suit workshops and consulting engagements. Project-based pricing is best when you can accurately estimate scope and is often more profitable since you benefit from efficiency. Start hourly and transition to project-based as you gain estimation experience.
How much should I increase my rate each year?
At minimum, raise rates by inflation (3-5%) annually. If you are consistently booked at 80%+ utilization, you are underpriced. Raise rates 10-20% for new clients immediately. For existing clients, give 30-60 days notice of a 5-10% increase. Track your finances across projects with the profitability calculator.
Track Your Freelance Finances
Manage income, expenses, and profitability across all your clients and projects in one dashboard.