Freelance Hourly Rate Calculator
Charging by the hour means every hour you cannot bill has to be paid for by the ones you can. This calculator runs the chain backwards: from the take-home pay you want, up through tax on profit and your business expenses, to the revenue you must invoice — then divides by the hours you can genuinely bill, not the hours you work. The result is an hourly, day, and weekly rate that actually leaves you with what you set out to earn.
What you need to earn
After tax, per year.
Per year: software, insurance, gear, accounting.
Your effective rate, income plus self-employment.
Time you can actually bill
Client work only — not admin or sales.
52 minus holiday, sick days, and slow weeks.
Used for the day rate.
Billable plus unbillable, for your utilisation rate.
Your rate
Enter the take-home you want, your billable hours per week, and the weeks you work per year.
Send a proposal that looks like the rate
Design the proposal, rate card, or invoice template on a Moda canvas.
Try Moda free →Why “salary ÷ 2,080” gives you the wrong number
The familiar shortcut — annual salary divided by 2,080 hours — describes an employee, and a freelancer is not one. It assumes every working hour is paid, which is the single biggest error in freelance pricing: nobody bills 40 hours a week, because finding work, writing proposals, invoicing, chasing invoices, and doing your own admin are all unpaid. It also assumes 52 weeks of work, no equipment costs, no insurance, no software, employer-paid taxes, and paid holiday. Every one of those is now yours. A freelancer charging an $80,000 salary as $38.46 an hour is, in practice, working for well under half that once the unbilled hours and the expenses come out.
Billable hours are the number that decides the rate
Utilisation — billable hours as a share of hours worked — is where the rate is really set, and honest figures for solo work land between 50% and 70%. That means a 40-hour week produces 20 to 28 billable hours, and the difference between assuming 25 and assuming 35 changes the required rate by 40%. Working weeks matter just as much: 52 is a fantasy, and 46 or 48 is realistic once holiday, illness, and the quiet gaps between contracts are counted. The two together are what turn a plausible-looking hourly figure into an income that falls short every year — so this page asks for both explicitly, and flags a utilisation assumption that looks too optimistic.
Tax comes out of profit, not revenue
The order matters. Business expenses are generally deductible, so they come out of revenue before tax is calculated, and the tax applies to what is left. That is why this calculator grosses up your target take-home by the tax rate first and adds expenses afterwards — doing it the other way round overstates the rate you need. Set the tax rate to your effective rate rather than your top bracket, and remember it has to include self-employment or national insurance contributions, which an employee never sees because an employer pays half. This is one flat rate applied to profit; real tax is bracketed and depends on your country, your deductions, and your business structure. Use the output as a pricing floor and confirm the tax side with an accountant — nothing here is tax or financial advice.
Frequently asked questions
How do I calculate my freelance hourly rate?
Start from the take-home you want, divide by (1 − your effective tax rate) to get the profit you need before tax, add your annual business expenses to get the revenue you must invoice, then divide by your billable hours for the year — billable hours per week times the weeks you actually work. That is the chain this calculator runs.
How many hours a week can a freelancer really bill?
Between 20 and 30 is realistic for most solo freelancers working full time, which is a 50–70% utilisation rate. The rest goes on finding work, proposals, admin, invoicing, and your own learning. Planning for 35 or 40 billable hours is the most common way a rate ends up too low, because the shortfall does not show up until the year is over.
Should I charge hourly or a fixed project fee?
The rate this calculator gives you is useful either way — it is the floor a project fee has to clear once you estimate the hours honestly. Fixed fees reward you for getting faster, where hourly billing quietly penalises it, so many freelancers move to project pricing as they gain experience. Either way you need to know what an hour of your time has to be worth.
What expenses should I include?
Everything the work requires that an employer would otherwise have covered: software subscriptions, hardware amortised over its life, professional insurance, accounting fees, a coworking desk or a share of home costs, professional development, and any subcontractors. Health insurance and retirement contributions are worth deciding on deliberately — either as expenses here or as part of the take-home figure, but not silently in neither.
Does this account for taking holiday?
Yes, through the working-weeks field. Nobody pays a freelancer for time off, so unpaid holiday has to be funded by the weeks you do work. Setting working weeks to 46 rather than 52 is what pays for six weeks of holiday and sick days, and it raises the required rate by about 13%.
Is the calculated rate what I should quote?
It is a floor, not a market price. It tells you what you need to charge to hit your income goal at your assumptions — it knows nothing about what your market pays, what your work is worth to a client, or how busy you are. If the number comes out above what clients pay in your field, the answer is usually fewer, better-paid hours or a different positioning rather than working more of them.