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How to Calculate Your Hourly Rate
Most freelancers set their rate by copying competitors or guessing — then wonder why a 'good year' paid less than a job. Your rate must cover your target income, your business costs, taxes and the reality that not every hour is billable. This guide does the math properly, then hands you the calculator.
Step by step
- Open the Hourly Rate Calculator.
- Enter the yearly income you want to take home.
- Add your yearly business costs (tools, software, insurance, vehicle, phone).
- Enter your billable hours per week and working weeks per year — be honest, admin and holidays are not billable.
- Your minimum hourly rate appears — charge above it, not below.
Open the Hourly Rate Calculator tool
Tips for better results
- Billable hours are typically 50-70% of your working time. Quoting on 40 billable hours a week is the classic route to burnout and underpay.
- Add a profit/contingency margin (10-20%) on top of break-even — the calculator gives you the floor, not the ceiling.
- Review the rate yearly: costs rise, skills grow, and your price should say so.
Frequently asked questions
Rate = (Target income + Business costs) ÷ (Billable hours per week × Working weeks). Example: ($60,000 + $6,000) ÷ (30 × 48) = $45.83 per hour.
Start from 52 and subtract holidays, sick days and quiet periods — 46-48 working weeks is realistic for most people.
Your target income figure should be what you need BEFORE personal income tax planning; many people add a buffer. When in doubt, raise the target — clients rarely ask you to charge less.