Freelance rate calculator

How the calculation works

1. Working weeks = 52 minus the weeks you take off.
2. Billable hours a year = working weeks × hours you work a week × the share you can bill.
3. Revenue you need = (income you want + business costs) × (1 + your margin).
4. Hourly rate = revenue you need ÷ billable hours a year.
5. Day rate = hourly rate × hours in a billable day.

Billable hours are the number that matters

Every hour you spend finding clients, writing quotes, sending invoices and answering email is paid for by the hours you bill. Set the billable share from your own records: track two or three typical weeks, including the admin, and divide billable hours by all hours. Our guide to tracking billable hours shows how.

Hourly, day rate or fixed price

The same yearly target gives an hourly rate and a day rate. For a whole project, estimate the hours, add a contingency and quote one price: our guide to fixed price vs hourly explains when each fits. When your rate goes up, here is how to tell clients about a rate increase.

Tax is on top of this

The income you enter is before income tax, so the rate covers it before tax. How much to set aside depends on your country: in the US, see invoicing as a 1099 contractor for self-employment and estimated tax; in the UK, see invoicing as a sole trader. Your tax authority or an accountant has the figures for your case.

In Clodou

• Quotes and invoices from one sentence at the rate you give it; it never invents an amount.
• Hours you log turn into a draft invoice, so billable time gets billed.
• It lists who owes you money and prepares reminders you approve before they are sent.

Invoice Atlas Design for 12 hours of design at $90 an hour

More about Clodou on the AI invoicing software page.

Questions

How do I calculate my freelance hourly rate?

Add the yearly income you want to your yearly business costs, add a margin for slow months, then divide by the hours you can actually bill in a year: working weeks × hours a week × the billable share. The calculator does exactly that.

How many hours a week can a freelancer bill?

Fewer than you work. Finding clients, quoting, invoicing, email and learning take time nobody pays for. Track a few weeks of your own time to find your billable share, and use that number rather than a rule of thumb.

Should I charge by the hour or by the day?

Hourly suits small, unpredictable tasks; a day rate suits full days of work for one client and is common for consultants and contractors. Both come from the same yearly target, so the calculator shows both. For whole projects, a fixed price built from your hourly rate is often clearer for the client.

How do I turn a salary into a freelance rate?

Enter the salary as the income you want, then add what your employer paid for and you now pay yourself, such as health insurance, retirement contributions and equipment, to your business costs. Paid holidays are covered by the weeks off.

Does the rate include tax?

The income is before income tax: the rate covers what you want to earn before tax, plus your costs. How much tax to set aside depends on your country and situation, so check with your tax authority or an accountant.

What is a good freelance rate?

The one that covers your target income, your costs and your unbilled time, and that your clients accept. Start from your own numbers with the calculator, then compare with what your market pays.