Freelance hourly rate calculator

As a freelancer, you need to consider many variables when determining your hourly rate. Our calculator is built to guide you and take all of them into account.

Your hourly rate is always tied to your annual revenue target. Your earnings as a self-employed consultant aren’t just the hours you work multiplied by your rate – it’s your total compensation including any time off and any overhead expenses you incurred.

Start by deciding how much you want to earn per year. Our freelance rate calculator will take that number into account to determine your ideal hourly rate.

When you’re self-employed, you’re in charge of your own schedule. Which means you can give yourself as much time off as you want – as long as it’s aligned with your salary target. To calculate your freelance hourly rate, you need to decide how many days a year you’ll be taking off work.

Our calculator excludes weekends by default, so you don’t need to worry about that. Only consider the vacation and holidays you’ll want to observe throughout the year and plug that number in.

We all know how much we’re supposed to work per day. But how much do we actually work? To get a reliable and profitable hourly rate, you need to be honest about the number of hours you work per day. This includes both billable and non-billable time, i.e. what you can put on the invoice as well as the costs you have to absorb as a self-employed person.

Out of the total hours worked, billable hours is what makes it to the invoice. Any revenue-generating work for the clients is considered billable; however, every consultant has their own philosophy around calculating billable time.

For the purposes of this calculator, you need to consider the average daily hours you charge to your clients as their consultant. Not your ideal daily billable target but the actual number of hours you’re able to put on the invoice per day.

Anybody who’s run their own business knows that there are costs they can’t directly bill to the clients and have to therefore absorb. We’ve mentioned time off but what about the tools you use as a freelancer and any expenses such as hardware and software, office supplies, rent, utilities, etc.?

To calculate a valid hourly rate, you have to consider these expenses and distribute them evenly among your projects and clients if you want to stay profitable. Make sure to plug your annual business expenses into the calculator as well.

If there’s one thing that can dramatically impact the profitability of your freelance business without altering your workload, it’s the way that you track time and charge for it. For example, if you estimate your time, you can easily under- or overcharge clients because your memory is unreliable. Most freelancers who guesstimate their hours end up undercharging and overservicing clients.

The amount of billable time you’re able to recover varies greatly depending on your method of tracking time. If you use start/stop timers or notes to capture your billable time, you often miss small tasks and interruptions, which results in half-accurate billables.

With automatic time tracking, on the other hand, you’re able to capture any overlapping tasks, incoming phone calls, “quick” revisions, any anything else that would otherwise go unnoticed.