How to use this calculator
Freelance pricing needs to account for non-billable time, expenses, taxes, and time off. This tool gives a practical starting point.
How the calculation works
- Adds your target take-home income and business expenses.
- Grosses up for a tax set-aside percentage.
- Divides the needed revenue by expected billable hours.
Formula
Hourly rate = (target income + expenses) / (1 - tax set-aside) / annual billable hours.
Example
If you need 80,000 income, 10,000 expenses, 25 billable hours per week, 4 weeks off, and a 25% tax set-aside, the suggested rate is 100 per hour.
Understanding your result
Use the suggested rate as a planning floor, then adjust for market demand, client risk, sales time, and the value of the work.
Assumptions and limitations
- This is planning math, not tax advice.
- Raise the rate if you need a margin for late payments, sales time, or slow seasons.
Frequently asked questions
Is this the rate I should charge every client?
No. It is a planning estimate. Client fit, scope, urgency, and market conditions can justify a higher or lower rate.
Why include tax set-aside?
Freelancers often need to reserve money for taxes separately, so the calculator includes it as an assumption.