Freelance rate calculator

Enter what you want to earn, your business costs and how much of your working time you can bill. The calculator shows the hourly rate you need, and the day rate that goes with it, for freelancers, consultants and contractors. It runs in your browser; nothing is sent or stored.

By Aleksandr Ulanov

How the calculator works

The calculator takes 52 weeks, subtracts your weeks off and multiplies by your working hours and your billable share. With the example's 6 weeks off, 40 hours a week and 65% billable, that is 1,196 billable hours a year, about 26 a week.

A take-home target of $60,000.00 with 25% set aside for tax needs a profit before tax of $60,000.00 ÷ 0.75 = $80,000.00. Your costs come on top: $80,000.00 + $6,000.00 = $86,000.00 of revenue. Divided by the billable hours, that gives $71.91 an hour, and $575.25 for an 8-hour day.

Costs are added after the tax step because the calculator treats the tax set-aside as a share of profit, and profit is revenue minus business costs. That's an assumption you can check: in most tax systems business costs reduce taxable profit, and the US self-employment tax below is also computed on net earnings.

If you pick “profit before tax”, the tax field disappears and the target is the profit itself. A profit target of $80,000.00 gives the same $71.91.

What to put in the tax field

Use the share of profit you set aside last year, or ask your accountant. The calculator doesn't compute tax: it applies the one percentage you enter.

One part of the US picture, as an example: the IRS says the self-employment tax is 15.3%, “12.4% for Social Security and 2.9% for Medicare”, and “the amount subject to self-employment tax is 92.35% of your net earnings from self-employment”. It applies once net earnings are “$400 or more”. 15.3% of 92.35% is about 14.1% of your net earnings, before federal and state income tax. The Social Security part stops at a yearly earnings cap that “changes annually”, and an additional 0.9% Medicare tax applies above $200,000 for a single filer or $250,000 for a married couple filing jointly.

This calculator is not tax advice.

Choosing the inputs

Billable share. This input moves the result most. At 50% instead of 65%, the example rate becomes $93.48. Measure it instead of guessing: track a few weeks of all your working time and divide the billable hours by the total. The billable hours calculator adds up and rounds the hours you tracked.

Weeks off. Count holidays, public holidays, sick days and the quiet weeks between projects.

Costs. Everything the business pays for in a year. Leave out your own pay, which is the target.

The calculator gives no market rates or recommended markups. We haven't found a primary source for freelance rates by profession, so we leave that number to you.

For consultants and contractors

A consulting or contractor rate follows the same arithmetic. Consultants often quote a day rate, so the day rate line uses your “hours in a billable day”: set it to the hours you actually bill on a client day, which may be fewer than the hours you work that day. Contractors outside the US can switch the currency; it changes only how the numbers are shown. To see how the hours behind that rate get tracked and invoiced, read our page on time tracking for consultants.

From a rate to an invoice

In Clockaroo, each project can have an hourly rate, and a person's own rate on a project wins over it. Rates are hourly and amounts are in your client's currency: euros, US dollars or pounds. The app has no day rate field. Reports show billable and non-billable hours for any period, which is where you read your real billable share: the report shows both totals, and you divide one by the other.

Save your rate on a project and invoice tracked hours with a free account. The Team plan costs $9 per person a month, with one price per person. Need an invoice right away? The freelance invoice template, the contractor invoice template and the UK invoice template come in Word, Excel and PDF.