How to Calculate Your Freelance Hourly Rate

Most new freelancers take an old salary, divide by 2,080 hours and quote that. It underprices you by 40–60%, because a freelancer does not bill 40 hours a week.

The formula

Rate = ((take-home goal ÷ (1 − tax rate)) + expenses) × (1 + buffer) ÷ billable hours

Example

Take-home goal: 60,000; tax rate 25% → 80,000 pre-tax
Expenses: 4,000 → 84,000
10% buffer → 92,400 revenue needed
46 working weeks × 40 h × 60% billable = 1,104 billable hours
Rate: about 83.70 per hour

Why billable share matters

Sales, admin, invoicing and revisions are unpaid. 50–65% billable is typical for the first years. Track a month of your time to find your real number.

Next steps

Plug your own numbers into the free rate calculator. Then price projects as hours × rate × a risk buffer of 20–30%.

Free tools: invoice generator · hourly rate calculator. Paperwork bundle: Freelancer Starter Kit.

General information, not legal or tax advice.