TOOLCharge what you actually need to earn
Most new freelancers under-charge because they convert their old salary straight to an hourly wage. That ignores expenses, taxes, unpaid admin time, holidays, and gaps between clients. This calculator works backward from the income you want to the rate that makes it real — accounting for the fact that only some of your hours are billable.
The formula
Hourly rate = revenue needed ÷ (billable hours/week × weeks worked)
The profit margin is a buffer for slow months, reinvestment and the self-employment taxes a salary never showed you.
Why billable hours are the catch
A 40-hour week is rarely 40 billable hours. Marketing, invoicing, emails, proposals and learning all eat time you can't charge for — most freelancers bill 20–30 hours of a 40-hour week. Enter your realistic billable hours, not your desk hours, or your rate will come out too low.
Comparing to a job offer? Turn any salary into an hourly figure with the salary converter.
Estimates are for planning only and don't calculate income or self-employment tax, which vary by location. Treat the profit margin as a rough buffer and confirm your tax obligations with an accountant.
Frequently asked questions
How do I calculate my freelance hourly rate?
Add your target salary and annual business expenses, add a profit margin, then divide by your billable hours per year (billable hours per week times weeks worked). That gives the hourly rate you need to charge.
Why can't I just use my old salary's hourly wage?
As a freelancer you cover expenses, taxes, unpaid admin time, holidays and gaps between clients yourself. Only a fraction of your working hours are billable, so your rate must be well above a simple salary-to-hourly conversion.
What are billable hours?
Billable hours are the hours you can actually charge a client for. Admin, marketing, invoicing and learning are not billable, so most freelancers bill far fewer hours than they work — often 20 to 30 of a 40-hour week.