The Math Freelancers Skip (and Regret)
The classic mistake is dividing a salary by 2,080 hours — a full employee year — and quoting that. But a freelancer's year is nothing like 2,080 billable hours. Remove vacation, public holidays and sick days, then remove the 30–50% of each remaining day that goes to finding clients, proposals, invoicing and email, and most independents actually bill 900–1,300 hours a year. Your rate must also fund what an employer used to pay: self-employment taxes, insurance, retirement, equipment and software.
This calculator works the honest direction: (target income + expenses) ÷ (1 − tax rate) = required revenue, divided by your real billable hours. The result is your floor — the rate below which you're quietly losing money. Quote project prices from it (estimate hours × rate + 20% buffer, as the table shows), sanity-check a salaried offer against it with the Salary Hike Calculator, plan business viability with the Break-Even Calculator, and bill it cleanly with the Invoice Generator.
Worked example
Nearly triple the naive $60,000 ÷ 2,080 = $29/h — that's the gap this calculator exists to close.
Frequently Asked Questions
How do I calculate my freelance hourly rate?
(Target income + expenses) ÷ (1 − tax rate) = revenue needed; divide by real billable hours (working days minus vacation/sick, times hours, times your billable %). Only 50–70% of freelance time is typically billable.
Why is a freelance rate higher than an employee wage?
It must cover taxes, insurance, retirement, equipment, unpaid leave and unbillable admin time that an employer normally absorbs — a sustainable rate is usually 1.5–2× the employee hourly equivalent.
What percentage of my time is billable?
Typically 50–70%; new freelancers often bill under 50%. The rest goes to marketing, proposals, invoicing and email — that's why utilization is a first-class input here.
Should I charge hourly or per project?
Keep the hourly rate as your internal floor and quote fixed project prices: estimated hours × rate + 15–25% buffer. Project pricing rewards speed; hourly caps your income.
Are my numbers uploaded anywhere?
No — everything is calculated in your browser. Your income and tax details are never sent, stored or logged.