---
title: "Freelance rate calculator"
url: "https://timeretain.com/tools/freelance-rate-calculator"
description: "Calculate your target hourly rate from personal income goals, business expenses, and real billable capacity. Your numbers stay in your browser."
---

# Freelance rate calculator

Find the hourly rate you need to reach your target take-home pay.

This calculator runs in your browser. Enable JavaScript to customize income, expenses, and hours.

## How to calculate your freelance rate

An employee salary covers 40 paid hours every week, plus benefits and paid time off. A freelance rate works in reverse: you decide what take-home money you need, add overhead and taxes, and divide that total by the hours clients will actually buy.

The formula follows three basic steps:

```
Gross revenue needed = (Target income ÷ (1 − Tax rate)) + Annual expenses
Annual billable hours = (52 − Weeks off) × Weekly hours × Billable capacity %
Target hourly rate = Gross revenue needed ÷ Annual billable hours
```

## A worked example

$90,000 take-home, $12,000 expenses, and a 25% tax rate need $132,000 of gross revenue. Tax applies to profit, so expenses are added after that gross-up.

With 4 weeks off, 35 hours per week, and 60% billable time, that is 1,008 billable hours a year and 21 billable hours a week. The target hourly rate is about $131.

## Daily and project rates

A day rate is the hourly rate times the billable hours in a working day. At 21 billable hours a week across 5 days, that is 4.2 billable hours a day, not an 8-hour employee day. Multiply the hourly rate by that figure.

For a project fee, estimate the billable hours the work will take and multiply by the hourly rate.

## The cost of running a freelance business

Freelancers must pay for items an employer usually handles:

Expense category

Common costs

**Business overhead**

Software subscriptions, hardware, web hosting, accounting, and legal fees.

**Self-employment taxes**

Additional tax contributions that employers usually pay half of.

**Unpaid time off**

Holidays, vacation, and sick leave where no income is earned.

**Non-billable labor**

Time spent writing proposals, tracking invoices, and marketing your services.

If you only charge what a regular job pays per hour, you will earn less money once expenses and unpaid hours take their share.

## Why 100% billable time is unrealistic

A common mistake is assuming a 40-hour workweek yields 40 billable hours.

In practice, solo contractors spend a large share of time running their business:

*   Writing project proposals and scopes
*   Bookkeeping and sending invoices
*   Finding new clients and answering initial leads
*   Internal tool maintenance and learning

Most solo professionals maintain a billable capacity between 50% and 65%. On a 35-hour week, that equals 18 to 22 billable hours. [Billable vs non-billable hours](/blog/billable-vs-non-billable-hours) covers which tasks belong on an invoice and which belong in your overhead.

## Track actual billable hours

A target rate gives you a benchmark for client proposals. To reach your income goal, you must know whether your real work matches that plan.

TimeRetain lets you track billable time and administrative work [on your own device](/blog/what-is-offline-time-tracking) with manual timers and simple tags. You can check your actual billable capacity over time without uploading private records to third-party servers.

![TimeRetain](/favicon.svg)

Track billable and non-billable hours on your device.

[Start tracking →](/)

If you already have timesheet records from past client work, use the [billable hours calculator](/tools/billable-hours-calculator) to total your past invoices.

## Questions and Answers

### How do I calculate my freelance hourly rate?

Gross up your take-home income for tax, add annual business expenses, then divide that gross revenue by the billable hours you expect to sell in a year.

### What is a realistic billable capacity for a freelancer?

Most solo freelancers bill between 50% and 65% of their working hours. The remaining time goes to proposals, invoicing, marketing, client communication, and admin.

### Why is my hourly rate so much higher than an employee salary?

Freelancers cover their own business expenses, unpaid holidays, sick days, health insurance, and self-employment taxes. You also sell fewer billable hours per year because admin and sales work are unpaid.

### How do I turn an hourly rate into a daily rate or project fee?

Multiply your hourly rate by the billable hours you work in a typical day, or estimate the total billable hours a project requires and multiply by that rate. A day rate is not an 8-hour employee day unless you actually bill eight hours.

### Does this calculator upload my numbers?

No. The calculation runs entirely in your browser. No financial numbers or inputs leave your device.