How do I calculate my freelance hourly rate?

Start with your desired annual salary, add business expenses (software, equipment, insurance), account for taxes and profit margin (15-25%), then divide by your actual billable hours per year (typically 1,000-1,500 hours). This calculator does all the math for you.

What percentage of my time is actually billable?

Most freelancers can only bill 50-70% of their working hours. The rest goes to admin, marketing, invoicing, learning, and client communication. A common mistake is assuming 100% of your time is billable.

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 (charging based on outcomes) is most profitable but requires experience. Start hourly, move to project-based as you gain experience.

How often should I raise my freelance rates?

Review your rates annually at minimum. Raise them when you're fully booked and turning down work, after gaining new skills or certifications, when your results consistently exceed expectations, or when inflation erodes your purchasing power.

Why do freelancers charge more than employees?

Freelancers pay self-employment taxes (15% extra in the US), cover their own health insurance and retirement, have unpaid time off, buy their own equipment, and handle business expenses. A $50/hour employee costs an employer roughly $65-75/hour in total compensation.

100% Free - No Sign Up Required

Freelance Rate Calculator

Calculate your ideal hourly, daily, and project rates based on your income goals, expenses, and availability. Stop undercharging.

Income Goals

What do you want to earn as a freelancer?

Desired Annual Salary$80,000

$30K$300K

Monthly Business Expenses$500

Software, hosting, equipment, insurance, etc.

Profit Margin20%

Buffer for taxes, savings, and growth

Time & Availability

How much time can you actually bill?

Hours Working Per Week40 hrs

Billable Hours Percentage60%

Rest goes to admin, marketing, learning

Vacation Weeks Per Year3 weeks

Include holidays and sick days

Your Recommended Rates

Your Hourly Rate

$88

per billable hour

$703

Day Rate

$2,107

Weekly

$8,600

Monthly

Project Rate Guide

Suggested flat rates based on project size

Small Project

~10 hours

$878

Medium Project

~1 week

$3,511

Large Project

~1 month

$14,041

Calculation Breakdown

Working weeks/year49 weeks

Billable hours/week24 hrs

Total billable hours/year1,176 hrs

Annual revenue target$103,200

Track Your Rates

Create invoices in 30 seconds
Track time per project automatically
See your real effective hourly rate

Start Free Trial

Freelance Pricing Guide

How to Calculate Your Freelance Rate

Most freelancers undercharge because they calculate their rate wrong. Here's what you need to know.

Start With Income Goals

Consider what you'd earn as an employee, then add for benefits you need to cover yourself.

Be Realistic About Time

Not all hours are billable. Account for admin, marketing, and learning time.

Build in Margin

Add 15-25% for taxes, savings, equipment upgrades, and dry spells between projects.

Why Most Freelancers Undercharge

The biggest mistake new freelancers make is calculating their rate based on what they earned as employees. But freelancing has hidden costs:

Self-employment taxes — You pay both employer and employee portions (~15% extra in the US)
No benefits — Health insurance, retirement, paid time off come out of your rate
Unbillable time — Marketing, admin, invoicing, learning take 30-50% of your time
Business expenses — Software, equipment, office space, professional development
Income instability — You need reserves for slow months and gaps between clients

Hourly vs. Project Rates

While hourly rates are simple, consider project-based pricing as you gain experience:

Hourly

Good when scope is unclear or ongoing

Project-based

Better for defined deliverables, rewards efficiency

Value-based

Price based on outcome value, not time spent

When to Raise Your Rates

You're fully booked and turning down work
You've gained new skills or certifications
Your results consistently exceed expectations
It's been more than a year since your last increase
Inflation has eroded your purchasing power

Frequently Asked Questions

More free tools for freelancers:

Free Invoice Generator →Late Fee Calculator →Invoice Templates →

Put Your Rates to Work

Now Invoice at Your True Rate

Knowing your rate is step one. Quidbill helps you invoice clients professionally and get paid faster so you can focus on the work.

Create Your First Invoice Free Invoice Generator

$19/month or $99/year for founding members • 30-day money-back guarantee