How to use this calculator
Start by entering your desired annual take home income. This is what you want to deposit into your personal account after all business costs are covered. Then add your annual business expenses including software subscriptions, insurance, equipment, coworking space, and any other costs of running your freelance business.
Next, configure your work schedule. Enter how many weeks of vacation you plan to take, sick or personal days, hours per working day, and days per week you plan to work. Finally, set your non-billable percentage to account for time spent on admin, marketing, proposals, and bookkeeping.
Frequently asked questions
How do I calculate my freelance hourly rate?
Add your desired income and business expenses, then divide by (1 minus your tax rate) to get total revenue needed. Divide that by your annual billable hours. The result is your minimum hourly rate.
What percentage of freelance time is non-billable?
Most freelancers spend 20% to 40% of their working hours on non-billable tasks like invoicing, marketing, client calls, bookkeeping, and professional development. Start with 25% and adjust based on your actual tracked time.
Should I charge hourly or project rates?
Project rates reward your expertise and speed. As you get faster, hourly billing actually penalizes your efficiency. Use your hourly rate as a baseline for estimating project quotes, but present fixed prices to clients when possible.
How much should I set aside for taxes?
In the US, plan to set aside 25% to 30% of your gross revenue for taxes. This covers self-employment tax (15.3%) plus federal and state income taxes. Open a separate savings account and transfer your tax portion after each payment.
How often should I raise my freelance rates?
Review rates every six months and increase annually at minimum. Start by raising rates for new clients, then notify existing clients with 30 to 60 days advance notice. Most successful freelancers increase 10% to 20% per year.