Freelancers often underprice their time. This calculator factors in your target salary, business expenses, taxes, and the reality that you cannot bill 24/7 to give you a realistic hourly rate that covers all costs.
Hourly Rate:
Annual Revenue:
How to Use This Tool
Enter your desired annual salary (what you want to take home).
Estimate your annual business expenses (software, equipment, insurance).
Enter your expected tax rate as a percentage.
Enter your realistic billable hours per year (typically 1000-1200 for freelancers).
Click Calculate to get your true hourly rate.
The Formula
Hourly Rate = [(Target Salary x (1 + Tax Rate)) + Expenses] / Billable Hours. This ensures your rate covers salary, taxes, and business costs — not just what you pocket.
Why It Matters
You want to earn $120,000/year as a freelancer. Accounting for 20% non-billable time, taxes, and $5,000 annual expenses, you need to charge $85/hour — far more than the naive $57/hour calculation.