Last updated: July 2026
What is a Freelance Hourly Rate?
A Freelance Hourly Rate is the exact amount of money you must charge clients per hour to meet your financial goals. Unlike a salaried employee, a freelancer must account for business expenses, unpaid time off (vacations, holidays, sick days), and non-billable administrative tasks (marketing, invoicing, proposals) when determining their rate.
How to Use the Freelance Rate Calculator
- Enter your income target: Input your desired annual net income and estimated business expenses (software, equipment, taxes).
- Define your availability: Set how many days a week you want to work, your daily hours, and how many days you plan to take off for vacation, holidays, and sick leave.
- Adjust efficiency: Estimate the percentage of time you spend on non-billable tasks (usually 20-30%) and add a profit margin for savings or investments.
- View your rate: The calculator instantly provides your minimum hourly, daily, and weekly rate based on your exact parameters.
How We Calculate Your Rate
Our calculator uses a precise, reverse-engineering technique to find your true billable capacity:
- Total Working Days: (52 weeks × Work Days per Week) − (Vacation + Holidays + Sick Days).
- Billable Hours: Total Working Days × Hours per Day × (100% − Non-Billable %).
- Gross Target Revenue: (Desired Income + Expenses) + Profit Margin.
- Hourly Rate: Gross Target Revenue ÷ Billable Hours.
Freelance Rate Example
Let's say you want to earn $75,000/year with $5,000 in expenses. You want to work 5 days a week, 8 hours a day, but take 30 days off a year (vacation, holidays, sick). You spend 25% of your time on non-billable tasks and want a 10% profit margin.
- Your gross target revenue with margin is $88,000.
- Your total working days are 230 (1,840 hours total).
- Removing 25% non-billable time leaves 1,380 billable hours.
- Your minimum billable rate is $88,000 / 1,380 = $63.77/hr.
Frequently Asked Questions (FAQ)
What is a freelance hourly rate?
A freelance hourly rate is the minimum amount you need to charge per hour to cover your business expenses, taxes, and desired personal income, factoring in unbillable time like marketing and administrative work.
How is the freelance hourly rate calculated?
The rate is calculated by taking your total desired gross revenue (desired net income + business expenses + profit margin) and dividing it by your total billable hours in a year (total working hours minus time off and unbillable tasks).
What are non-billable hours?
Non-billable hours are time spent on business tasks that you cannot directly charge a client for. This includes answering emails, bookkeeping, marketing, writing proposals, and learning new skills. Typically, freelancers spend 20% to 30% of their time on non-billable tasks.