How to Calculate Your Freelance Rate
Setting the right freelance rate is crucial for your business success. This calculator helps you determine a sustainable hourly and daily rate based on your income goals, available billable hours, and business overhead costs.
The formula takes into account that not all your working hours are billable - you will spend time on administrative tasks, marketing, and professional development. A typical freelancer bills 60-75% of their total working hours.
Overhead costs include health insurance, retirement savings, software subscriptions, office space, equipment, taxes, and other business expenses. Most freelancers need to add 25-40% to their base rate to cover these costs.
When setting your rate, research market rates in your industry and location. Consider your experience level, specialized skills, and the value you provide to clients.
Quick Tips
- Track your profit margin, not just revenue
- Factor in ALL costs when pricing services
- ROI should account for time value of money
Frequently Asked Questions
A good freelance rate depends on your industry, experience, and location. Generally, aim for 2-3x what you would earn as an employee per hour to account for unbillable time and overhead costs.
Most freelancers bill 20-30 hours per week, even if they work 40+ hours total. The rest goes to admin, marketing, and business development.
Both have advantages. Hourly is simpler and protects against scope creep. Project-based can be more profitable if you work efficiently.
Review and adjust your rates annually, or when you gain significant new skills or experience. Existing clients can be grandfathered in.
Include health insurance, taxes (15.3% self-employment tax in US), retirement, software, equipment, office space, professional development, and a buffer for unpaid time off.