How do I calculate my freelance hourly rate?

Start with your desired annual salary, add business expenses such as software, equipment, and insurance, account for taxes and margin, then divide by your realistic billable hours per year. Many freelancers only bill 1,000-1,500 hours annually.

Should I charge hourly or project-based rates?

Hourly rates work well when scope is unclear or for ongoing work. Project-based rates are better for defined deliverables and reward efficiency. Value-based pricing can be more profitable, but it requires a stronger understanding of client outcomes.

How often should I raise my freelance rates?

Review rates at least once a year. Raise them when you are fully booked, turning down work, adding stronger skills, producing better outcomes, or when inflation and costs reduce your effective income.

Why do freelancers charge more than employees?

Freelancers cover self-employment taxes, health insurance, retirement, unpaid time off, equipment, software, and business development. A freelancer rate must cover the whole business, not just take-home pay.

Freelance pricing tool

Freelance rate calculator.

Q: What percentage of my time is actually billable?

Most freelancers can bill 50-70% of their working hours. The rest goes to admin, marketing, proposals, invoicing, learning, and client communication. Assuming 100% billable time is one of the fastest ways to undercharge.

Calculate an hourly, daily, and project rate from your income goal, expenses, billable time, and margin. The point is simple: stop pricing from vibes.

Income target

Billable capacity

Real rate

Income goals

Start with the money you actually need the business to produce.

Desired annual salary$80,000

$30K$300K

Monthly business expenses$500

Software, hosting, equipment, insurance, training, and tools.

Margin20%

Buffer for tax, savings, slow months, and business growth.

Time and availability

Your rate is only real after unbillable work is included.

Hours working per week40 hrs

Billable percentage60%

Admin, marketing, proposals, invoicing, learning, and client calls are real work too.

Vacation weeks per year3 weeks

Include holidays, sick days, and planned downtime.

Recommended rates

Hourly rate

$88

Per billable hour, based on 1,176 billable hours per year.

Day rate

$703

Weekly

$2,107

Monthly

$8,600

Project rate guide

Small project

~10 hours

$878

Medium project

~1 week

$3,511

Large project

~1 month

$14,041

Breakdown

Working weeks/year49 weeks

Billable hours/week24 hrs

Billable hours/year1,176 hrs

Annual revenue target$103,200

Put your rate to work

A rate only helps if your invoices, terms, and follow-up make it collectible.

Create invoices quickly
Track invoice status
Keep pricing consistent

Start in Quidbill

Pricing guide

Your rate is a capacity equation.

Freelance pricing breaks when it ignores unbillable work. This calculator makes the hidden time visible before you quote the next project.

Start with income, not market panic

Your rate should begin with what the business needs to support you, then be checked against positioning and demand.

Price unbillable time

Admin, proposals, client calls, invoicing, learning, and sales are not free just because they do not appear on a timesheet.

Build a margin

A healthy rate includes tax, savings, dry spells, equipment, insurance, and the cost of improving your craft.

Why freelancers undercharge.

Using an old employee salary as the whole benchmark.

Assuming every working hour can be billed to a client.

Forgetting self-employment taxes, benefits, and unpaid downtime.

Keeping the same rate after the work quality or demand changes.

Pick the pricing model after the rate exists.

Hourly

Useful for unclear scope, advisory calls, support retainers, and discovery work.

Project-based

Better for defined deliverables where speed and expertise should not reduce your income.

Value-based

Works when you can connect your work to client revenue, cost reduction, or risk reduction.

Frequently Asked Questions

Related tools

Now invoice at the rate you actually need.

Quidbill keeps client records, invoice history, and payment status in one place so your rate does not get lost in admin.