Freelance Hourly Rate & Billable Hours Calculator

Calculate the minimum hourly and project rate needed to achieve target annual net income after self-employment taxes, overhead, and non-billable time.

Configurable Calculation Inputs

Desired Annual Net Income ($): number (Default: 90000 $)
Annual Business Expenses (Software, Gear): number (Default: 8000 $)
Vacation & Sick Weeks / Year: slider (Default: 4 wks)
Total Working Hours per Week: slider (Default: 40 hrs)
Billable Time Percentage: slider (Default: 60 %)
Tax & Healthcare Reserve (%): number (Default: 30 %)

Mathematical Formula: Target Freelancer Hourly Pricing Formula

          Hourly Rate = (Target Income + Expenses + Self-Emp Taxes) / (Weeks * Hours/Wk * %Billable)
        

Accounts for the reality that only 50-70% of working hours are billable client time, while the rest is administration, marketing, and business development.

Comprehensive Guide & Context

The Non-Billable Trap

Beginner freelancers mistakenly assume 40 hours per week of client billing. In practice, invoicing, sales calls, marketing, and self-learning consume 30-40% of standard work weeks.

Worked Calculation Examples

Senior UX Designer Freelancing

$120,000 net target, $10,000 expenses, 4 weeks vacation, 60% billable utilization.

Result: $157 / hour ($1,256 / day)

Frequently Asked Questions

How much should freelancers save for taxes?

A common rule of thumb for US freelancers is to set aside 25% to 35% of every payment for federal self-employment and state income taxes.