The numbers behind a rate
Your freelance rate is the price per hour that covers what you want to take home, your business costs and your tax: for example, keeping $50,000 after 25% tax, with $6,000 of costs and 25 billable hours a week for 46 weeks, needs about $63 an hour.
Most rate mistakes come from counting every working hour as billable. These are the words the calculator uses.
- Take-home income
- What you want to keep each year after tax and business costs: the amount that pays your rent, savings and holidays.
- Business costs
- Everything the business pays for in a year: software, equipment, insurance, an accountant, a coworking desk, training and fees.
- Tax estimate
- A rough share of your profit that goes to income tax and social charges. Ask an accountant for the right figure where you live.
- Working weeks
- The weeks a year you are available for client work, after holidays, public holidays and a few sick days. Few freelancers manage 52.
- Billable time
- The hours or days you can charge a client for. Sales calls, admin, invoicing and learning are work, but nobody pays for them directly.
- Buffer
- A 20% cushion above the minimum rate, for quiet months, late payers and the costs you forgot.
- Real rate
- What each hour you actually work earns once unbilled client time is counted, such as extra revision rounds, long calls or small fixes nobody pays for.
Rates for a few example freelancers
These people are made up, and the figures are examples rather than market rates. Each row runs through the same logic as the calculator above.
| Example | Take-home goal | Costs a year | Tax | Billable time | Hourly rate | Day rate | With 20% buffer | Real rate after unbilled hours |
|---|---|---|---|---|---|---|---|---|
| Example: new web designer | $50,000 | $6,000 | 25% | 25 hours a week, 46 weeks | $63/h | $506 | $76/h | None entered |
| Example: brand designer | £45,000 | £5,000 | 30% | 3 days a week, 45 weeks | £64/h | £513 | £77/h | £55/h (4 unbilled h a week) |
| Example: developer, part time | €30,000 | €3,000 | 20% | 15 hours a week, 44 weeks | €61/h | €491 | €74/h | None entered |
| Example: video editor | A$70,000 | A$9,000 | 30% | 28 hours a week, 46 weeks | A$85/h | A$677 | A$102/h | A$70/h (6 unbilled h a week) |
| Example: copywriter | CA$60,000 | CA$4,000 | 25% | 4 days a week, 47 weeks | CA$56/h | CA$447 | CA$67/h | None entered |
| Example: UI designer in India | ₹18,00,000 | ₹2,00,000 | 20% | 25 hours a week, 46 weeks | ₹2,130/h | ₹17,043 | ₹2,557/h | ₹1,775/h (5 unbilled h a week) |
Where a rate calculation can mislead you
This is a floor, not a price
The calculator tells you the least you can charge and still reach your goal. What clients will pay depends on your skills, your market and how you present the work. Many freelancers charge well above their floor.
Billable hours are usually fewer than you think
Track a normal month before trusting your guess. If you can only bill 20 hours in a 40-hour week, enter 20.
Tax is an estimate
Tax rules differ by country and change with income. The tax field is a single rough share, not a tax return. Check the figure with an accountant.
Unbilled rounds quietly cut your rate
Every round of changes you do for free spreads the same money across more hours. The real-rate line shows how much, and the rate that would keep you whole.
Fixed prices still need an hourly number
If you quote per project, estimate the hours a job takes and use your rate to check the price. Then count your rounds, because extra rounds are where fixed prices leak.
Questions about setting a freelance rate
How many billable hours a week is realistic for a freelancer?
It varies a lot, but many full-time freelancers bill well under 40 hours, because finding work, admin and invoicing take time too. Count your own billable hours for a month and use that.
Should I charge by the hour or by the day?
Day rates suit work that fills whole days, such as workshops or on-site work. Hourly rates suit small, scattered tasks. The calculator shows both, with a day counted as 8 hours.
Why does the calculator add a 20% buffer?
Because the minimum rate assumes everything goes to plan. A buffer covers gaps between projects, late payments and costs you did not list.
What counts as unbilled hours?
Client work you do but do not charge for: extra revision rounds, long feedback calls, small favours and fixing things after sign-off. Leave the field blank if you bill all of it.
Should my rate change for different clients?
Your floor stays the same, but your price can change with the size of the job, the value to the client and how much feedback the project is likely to need.
How often should I review my rate?
At least once a year, and whenever your costs, your tax or your billable hours change. Raising rates for new clients first is the gentlest way.