Free tools · From Stranger to Sold
Freelance rate calculator
Most freelance rate calculators assume you bill 40 hours a week. You don’t. This one works out your minimum hourly and day rate from the hours you can really bill, then turns that rate into a project price you can send.
1. Your rate
Use yearly numbers
2. Quote a project
Uses the hourly rate above
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How to calculate a freelance hourly rate
The formula has three steps:
- What you must bill: (income you want + yearly costs) ÷ (1 − tax rate).
- Hours you can bill: (52 − weeks off) × billable hours per week.
- Minimum hourly rate: what you must bill ÷ hours you can bill.
The number that matters most is billable hours. A freelancer who works 40 hours a week does not bill 40. Part of every week goes on finding clients, writing proposals, invoicing, admin, learning and fixing your own tools. Nobody pays for those hours, but you still have to cover them. That is why 25 to 30 billable hours out of 40 is already a busy week, and why 20 is a safer starting point.
Plug in 40 billable hours and the rate looks comfortable. Then you bill 22 hours a week and earn half what you planned. The calculator gives a minimum: the rate below which the year doesn’t work. It is a floor, not a price.
Hourly vs project pricing
Hourly pricing is simple, but it has two costs. First, you get paid less as you get faster. Second, the buyer sees one number, your rate, and compares it with every other freelancer’s rate. That pushes you towards the cheapest person in the room.
A project price shows the buyer a result and a price for it. They compare it with the value of the result, not with someone else’s hourly rate. You also keep the gain when you get faster.
The risk is that the project runs over. That is what the buffer is for. Estimate the hours honestly, add 20% because projects run over, then add a margin. If a project often runs past the buffer, your scope is loose. Write down what is included before you quote, not after.
Hourly still fits open-ended work, such as ongoing support or “help as needed”, where nobody can say when it ends.
A worked example
A designer wants to take home 60,000 a year. Costs are 6,000 a year, tax is about 25%, and she takes 6 weeks off. She bills about 20 hours a week.
What she must bill: (60,000 + 6,000) ÷ 0.75 = 88,000. Hours she can bill: 46 weeks × 20 = 920. Minimum hourly rate: 88,000 ÷ 920 = about 96. Day rate: 96 × 8 = about 765.
A brand identity project looks like 40 hours. With a 20% buffer that is 48 hours. At 95.65 an hour that is 4,591, and a 10% margin takes it to about 5,050. She sends one price for the brand identity, not “40 hours at 96”.
If 5,050 feels too high to send, the maths is not the problem. The buyer can’t yet see why she is worth it. That is a positioning problem, covered in when clients say your price is too expensive.
Questions people actually ask
How do I calculate my freelance hourly rate?
Add the income you want to take home in a year to your yearly business costs. Divide by one minus your tax rate to get what you must bill before tax. Then divide by the hours you can actually bill in a year: working weeks times billable hours per week. The result is your minimum hourly rate, not your target.
How much should I charge as a freelancer?
At least the rate that covers your income, costs and tax on the hours you can really bill. Above that floor, charge what the result is worth to the client. Two freelancers with the same skills can charge very different rates because one is easier to choose for a specific job.
How do I price a freelance project?
Estimate the hours, add a buffer for overruns (20 percent is a sensible start), multiply by your hourly rate, then add a margin on top. Send one price for the outcome, not the hours behind it.
Should I charge hourly or per project as a freelancer?
Per project, once you can scope the work. A project price keeps the buyer looking at the result, not at your rate next to someone else’s. Hourly still suits open-ended work such as ongoing support, where nobody can define the end point.
More free tools
- Consulting rate calculator — your floor hourly and day rate as a consultant.
- Close rate calculator — your closing ratio and the stage where deals leak.
- Lead generation calculator — how many leads you need to hit a revenue goal.
Find your real bottleneck
A rate calculator tells you what to charge. It can’t tell you why buyers push back on that price. The free Bottleneck Finder can: 18 questions that score all nine stages of the path from stranger to customer and name the one that’s blocking you.
Find my bottleneck — free, 5 minutes
No email, no login. The full framework is the book From Stranger to Sold; the first chapter is free.