Freelance Rate Calculator
Calculate your ideal freelance hourly rate
The Complete Guide to Freelance Rate Calculation
Our Freelance Rate Calculator helps you set the right hourly rate to achieve your monthly income goals. By factoring in your desired earnings, expected billable hours, business expenses, tax obligations, and savings, you can confidently price your services for a sustainable freelance career.
How the Calculator Works
The calculator starts by determining the required monthly income to cover your income goal and business expenses while also setting aside funds for taxes and savings. This total is then divided by your billable hours to yield the minimum hourly rate you must charge.
Required Monthly Income = (Income Goal + Expenses) / (1 - Tax Rate - Savings Rate)
By understanding this breakdown, you gain insight into how each component of your financial plan affects your rate, ensuring you make informed decisions about your freelance pricing.
Monthly Income Breakdown
In addition to calculating your hourly rate, the calculator provides a detailed monthly breakdown, including:
- Gross Income: The total income required before deductions.
- Tax Set Aside: The portion reserved for taxes.
- Savings: The amount you plan to save each month.
- Business Expenses: Your ongoing operational costs.
- Net Income: The remaining income after all deductions.
Freelance Rate Calculator FAQs
What is the Freelance Rate Calculator?
It is a tool that helps freelancers determine the minimum hourly rate they need to charge by considering their desired monthly income, billable hours, expenses, tax rate, and savings.
How is my minimum hourly rate calculated?
The calculator first adjusts your monthly income goal by adding business expenses and factoring in tax and savings rates. This total is then divided by your monthly billable hours to compute your minimum sustainable hourly rate.
Why is it important to set a minimum hourly rate?
Establishing a minimum hourly rate ensures that you cover your expenses, pay taxes, and save for the future, helping you build a profitable and sustainable freelance business.