Stop guessing your rate. Enter your income goal, monthly expenses, and billable hours to find the minimum you need to charge.
Find the minimum hourly rate you need to charge to cover income goals and business expenses.
The formula is: Hourly Rate = (Monthly Income Goal + Monthly Expenses) ÷ Billable Hours per Month. For example: $5,000 income target + $500 expenses = $5,500 total needed. Divided by 80 billable hours = $68.75/hour minimum rate.
This is a floor, not a ceiling. The result is the minimum you must charge to break even on your income goals — your actual rate should be higher to account for income tax, retirement savings, health insurance, and unpaid business development time.
Many new freelancers overestimate billable hours. Of 160 working hours per month, typically 30–40% goes to non-billable work: prospecting, invoicing, admin, learning, and buffer for slow periods. A realistic billable target for full-time freelancers is 80–100 hours per month. Entering 160 billable hours will produce an unrealistically low rate.
Self-employed workers pay self-employment tax (15.3% in the US on top of income tax), have no employer-sponsored health insurance, and receive no paid leave. Add at least 25–30% to your calculated minimum rate to cover these costs. A $68.75/hour floor rate should become at least $85–90/hour before you accept work. Read the complete freelance rate guide →
Suppose you want to take home $4,500 a month, your business expenses (software, equipment, coworking, accounting) are $700, and you can bill 100 hours a month. The calculator divides the total by your billable hours:
($4,500 + $700) ÷ 100 = $52.00 per hour.
That is the minimum rate that covers your target. It does not yet include taxes. If you expect to pay roughly 30% of your income in taxes and social contributions, add that amount to the income figure: $4,500 × 30% = $1,350, so enter $5,850 as desired income. The rate becomes ($5,850 + $700) ÷ 100 = $65.50 per hour. The right tax percentage depends on your country – see our guide to freelance taxes.
A full-time month has about 160 working hours, but freelancers spend a large share of that time on proposals, email, invoicing, learning and finding the next client. Track your own billable hours for a couple of months before choosing the number. Entering 160 hours makes your rate look affordable and leaves you short every month.
Add your desired monthly income to your monthly business expenses, then divide by your billable hours per month. Example: ($5,000 income + $500 expenses) ÷ 80 billable hours = $68.75/hour minimum rate.
Most full-time freelancers realistically bill 70-100 hours per month. Of 160 working hours, 30-40% typically goes to non-billable work (admin, prospecting, etc.). Using 160 billable hours will produce an unrealistically low minimum rate.
Project-based pricing is generally more profitable if you work efficiently. Once your hourly rate is calculated, use it as a baseline for project quotes — multiply estimated hours by your rate, then add a 15-25% scope buffer for unexpected work.
Review your rates annually at minimum. Raise when your expenses increase, when your skill level or client quality improves, or when you're consistently booked. A 10-20% annual increase is normal for growing freelancers.