Freelance Hourly Rate Generator
Reverse-engineer your required hourly rate based on your target take-home pay, expenses, and billable hours.
1. Financial Goals
Desired Annual Take-Home
$
2. Overhead & Taxes
Annual Business Expenses
$
Estimated Tax Rate
%
3. Time Capacity
Weeks Off (Vacation/Sick)
Billable Hours per Week
⚠️ Invalid inputs detected. Please check your tax rate and weeks off.
Pricing Your Freelance Services
Many new freelancers make the mistake of taking their desired salary, dividing it by 2,080 (40 hours × 52 weeks), and setting that as their hourly rate. This almost always leads to burnout and under-earning. Here is why:
- You are a business: Employees have their software, hardware, internet, and office space paid for. Freelancers must pay for this themselves (Business Expenses).
- The Tax Burden: As a freelancer, you are responsible for both the employee and employer portions of payroll taxes (Self-Employment Tax in the US), making your effective tax rate higher.
- Unbillable Hours: You cannot bill clients for pitching, invoicing, marketing, or administrative tasks. A healthy baseline is assuming you will only be doing 20 to 25 billable hours a week, with the rest spent running the business.
- Time Off: If you don't build paid time off (PTO) and sick days into your hourly rate, you will never be able to afford to stop working.