Freelance Hourly Rate Calculator
Build an hourly billing target around income, overhead and realistic billable hours. Allow for profit without treating every working hour as paid work.
Your result
- Required hourly rate
- $76.09
- Annual billing target
- $87,500.00
- Annual billable hours
- 1,150
- Profit allowance
- $17,500.00
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Currency selection changes formatting only. No exchange rates or market prices are supplied.
Formula
Annual billing = (income + overhead) ÷ (1 − target margin); hourly rate = billing ÷ (weeks × billable hours).
Worked example
The initial example uses the following assumptions. Its result is computed by the same engine as the calculator. Measurements are metric and money amounts use USD; these are illustrative inputs, not market prices.
- Desired annual income before personal tax
- 60000
- Annual business overhead
- 10000
- Working weeks per year
- 46
- Billable hours per week
- 25
- Target profit margin (%)
- 20
- Required hourly rate: $76.09
- Annual billing target: $87,500.00
- Annual billable hours: 1,150
- Profit allowance: $17,500.00
Assumptions and limitations
Billable hours exclude sales, administration and unpaid work. Reduce working weeks for leave. Personal taxes and benefits are not calculated; this is a planning rate, not a market-rate or utilization promise.
Questions about this calculation
Is the profit percentage a markup?
No. It is a share of billing revenue. A 20% target margin means dividing costs by 0.8, not multiplying by 1.2.
How do I account for unpaid tasks?
Reduce billable hours. For full weeks away, reduce working weeks as well; do not count the same time twice.
Useful next steps
- Profit Margin Calculator
Find profit, profit margin and markup from revenue and costs. Compare the two percentages before setting a selling price.
- ROI Calculator
Compare the total amount returned with your investment. Calculate net gain or loss and simple return on investment.