How do I calculate my freelance hourly rate?

Take the monthly take-home you want, add your overhead percentage, then divide by your billable hours per month. The calculator does it for you.

What overhead should I use?

It varies, but 30–50% is common once you fold in taxes, tools, insurance and unbillable time. Higher if your taxes or costs are steep.

Why is my rate higher than my old salary implied?

Because a salary hid taxes, benefits and paid downtime that you now cover yourself, and you bill fewer hours than you work.

What are billable hours?

The hours you actually invoice a client for — not total hours worked. Admin, marketing and learning are usually unbillable.

Salary & Work

Freelance Rate Calculator

Setting a freelance rate is not just your old salary divided by hours — you have to cover taxes, tools, downtime and unbillable work. Enter the income you want and your real billable hours to find the rate to charge.

Your numbers

Result

Hourly rate to charge

$70.00

Monthly revenue needed: $7,000.00
Annual revenue needed: $84,000.00

Rate calculation
Item	Amount
Desired take-home / month	$5,000.00
Revenue needed (+40% overhead)	$7,000.00
Hourly rate to charge	$70.00

Why your rate is more than "salary ÷ hours"

As a freelancer, the hourly rate has to fund everything an employer used to: taxes, health insurance, equipment, software, and the hours you spend on admin and finding work that you cannot bill. That is the overhead. Take the take-home you want, add overhead, then divide by the hours you actually invoice — not the hours you work.

Billable hours are fewer than you think

A full-time schedule is ~160 hours a month, but freelancers rarely bill all of them — proposals, emails, learning and gaps between projects eat in. Many bill 50–70% of their time. Using 100 billable hours instead of 160 raises the rate you must charge to hit the same take-home, which is exactly the point.

A floor, not a ceiling

This gives the minimum rate that meets your income goal. What you can actually charge also depends on your market, skills and the value you deliver — often well above the floor. Use the number as a break-even you should not drop below, then price up from there.

Informational and educational result. Not a substitute for professional advice.

Frequently asked questions

Sources

Freelance pricing — cost-plus and billable-hours method

Embed this calculator

Copy the code and paste it into your site or blog. Credit with a link back to Contania is included, and the height adjusts itself.

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