Hourly Rate Calculator
Work backwards from the pay you want to the rate you must charge
Updated 2026-09-09
- Revenue needed per year
- $88,000.00
- Billable hours per year
- 1,150
- Rate to charge per hour
- $76.52
- Day rate (8 hours)
- $612.17
Billable hours are the ones a client actually pays for — quoting, admin, and travel are not billable for most solo businesses.
Your numbers stay on this device. The page link keeps your inputs, so a bookmark or shared link reopens these results.
Most freelancers set a rate by copying someone else and then wonder why the year comes up short. The honest method runs the other way: start from the take-home you need, add tax and business costs, and divide by the hours a client will actually pay for.
Why an hourly rate is not a salary divided by 2,080
An employee is paid for every hour at their desk. A freelancer is paid only for billable hours, and pays their own tax, insurance, software, equipment, holidays, and sick days out of the same rate.
A realistic billable week is often 20 to 30 hours, not 40 — quoting, invoicing, marketing, and admin all consume paid-for time without generating any. Working weeks land nearer 46 than 52 once holidays and illness are counted.
The costs to include before dividing
Anything you must pay because you are in business belongs above the line.
- Self-employment and income tax set-aside
- Health, liability, and equipment insurance
- Software subscriptions, hosting, and tools of the trade
- Equipment replacement spread over its useful life
- Accounting, banking, and professional fees
- Training, travel, and unpaid pitching time
Sanity-checking the number the calculator gives you
The output is a floor, not a market price. If it lands far above what your market pays, the fix is not to accept less indefinitely — it is to raise billable hours, cut costs, or move up-market in the work you take.
If it lands well below market rates, charge the market rate and bank the difference. An honest floor tells you when a job is worth taking; it does not cap what a job is worth.
Hourly, day rate, or fixed price
Each suits a different kind of work, and most established freelancers use all three.
- Hourly suits open-ended or maintenance work with unclear scope
- Day rates suit on-site work and simplify scheduling for both sides
- Fixed prices reward speed and expertise but need tight written scope
- Retainers smooth income and are worth a modest discount for the certainty
- Whichever you quote, calculate the underlying hourly figure first
Raising your rate without losing clients
Announce increases in writing with a start date at least a month ahead, apply them to new work first, and raise everyone rather than one awkward client at a time. Expect to lose the price-sensitive tail — that is usually the point, because the hours freed up bill higher elsewhere.
Keep the numbers in a spreadsheet
Ready-made Excel and Google Sheets templates that pick up where this calculator stops. One-off purchase, instant download.
Quote / Estimate Template Spreadsheet
Professional quote with validity date, tax, deposit and acceptance signature.
Invoice Template + Invoice Log Spreadsheet
Auto-totalling invoice with tax, discount and balance due, plus an overdue-flagging log.
Frequently asked questions
How many billable hours should I assume?
Most solo freelancers bill 20 to 30 hours in a 40-hour week. Assume more only if you have evidence from your own timesheets.
How much should I set aside for tax?
It depends on your country, state, and income, and this calculator simply applies the percentage you enter. Ask your accountant for your own figure.
Should I show my hourly rate publicly?
Publishing a day rate or a starting price filters out mismatched enquiries. Publishing a low hourly rate anchors negotiations against you.
How often should I raise my rate?
Review annually at minimum, and whenever you are fully booked — a permanently full diary is the clearest signal that your rate is below market.
Related reading
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Start freeAs an Amazon Associate, ExpressBizTools earns from qualifying purchases. Product links are affiliate links. Calculations are for general planning and are not tax, legal, or financial advice.