Why shouldn't I just divide my desired salary by 2080 hours?

A standard work year has 2080 hours (40 hours/week * 52 weeks), but as a freelancer, you can't bill all of them. You must account for business expenses, time off (vacations, holidays, sick days), and non-billable work like marketing, admin, and writing proposals. This calculator factors in those realities.

What should I include in 'Annual Business Expenses'?

Include all costs of running your business: software subscriptions (Adobe, etc.), computer hardware, marketing costs, business insurance, accounting fees, co-working space rent, professional development courses, and a portion of your home office utilities.

How do I convert my hourly rate to a fixed project price?

Once you have your hourly rate, estimate the total number of hours the project will take. Then, calculate: Project Price = (Estimated Hours * Hourly Rate). It's wise to add a 15-25% buffer to your estimated hours to account for unforeseen issues or scope creep.

Freelancer Hourly Rate Calculator

Think Like a Business, Not an Employee

When you transition from a salaried job to freelancing, your entire mindset about money has to change. Your hourly rate isn't just your salary divided by the number of hours in a year. You are now a business. You have expenses, you need to pay for your own time off, and not every hour you work is an hour you can bill to a client.

This calculator helps you make that mental shift. It forces you to account for your business expenses (like software and marketing), your vacation time, and the reality of non-billable administrative work. By doing so, it generates an **hourly rate** that truly reflects the value of your time and ensures your freelance career is not just a hobby, but a sustainable and profitable business.

Tools for Your Freelance Business

Profit Margin Calculator: Use this for fixed-price projects to check their profitability.
Invoice Generator: Create professional invoices with your new rate (hypothetical link).
Business Loan Calculator: Planning to buy new equipment? See what the financing would cost.

Frequently Asked Questions (FAQ)

How many billable hours should I aim for?

It's a common misconception that you can bill 40 hours a week. A more realistic target for a full-time freelancer is between 20-30 billable hours. The rest of the time is spent on essential non-billable tasks like marketing, client communication, invoicing, and professional development.

What about taxes?

This calculator determines your pre-tax income goal. As a freelancer, you are responsible for paying your own income and self-employment taxes (like Social Security and Medicare in the US). It's a good rule of thumb to set aside 25-35% of your income for taxes, depending on your location and tax bracket. Consult a local accountant for precise advice.

Should I show my hourly rate to clients?

It depends. Some clients prefer it for transparency. However, it's often better to use your hourly rate as an internal tool to calculate a fixed project price. This shifts the client's focus from "how many hours you work" to "the value and outcome you deliver," which is usually more beneficial for you.

Freelancer Rate Calculator

Required Annual Revenue

Total Billable Hours