How to Calculate Your Freelance Hourly Rate (Simple Formula)
A simple formula to set a freelance hourly rate that covers taxes, unpaid time and expenses.
The formula
Start with the yearly income you want, add your yearly business expenses, then divide by the hours you can actually bill. Most freelancers bill only 50 to 70 percent of their working hours, because admin, sales and email take the rest.
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Target income $60,000 plus $6,000 of expenses is $66,000. If you work 40 weeks at 25 billable hours, that is 1,000 hours, so your floor is $66 an hour. Add a buffer for taxes and slow months before you quote.
Track it to check it
Log every project's hours and invoice amount. After a few months, divide what you earned by the hours you spent to see your real rate, and raise prices on work that falls below your floor.
Freelancer Client Tracker + Invoice Kit
Clients, projects, invoices and an income dashboard in one spreadsheet.
Get it →Related templates
Free 1-Page Invoice Template
A clean 1-page invoice with every field you need to get paid.
Download free →Freelancer Client Tracker + Invoice Kit
Clients, projects, invoices and an income dashboard in one spreadsheet.
Get it →