How to Set a Freelance Rate That Covers Your Costs
Many freelancers price by guesswork and undercharge. Working backwards from income, expenses, and billable hours gives a rate you can defend.
What is the Freelance Rate Calculator?
This tool adds your desired annual income to your annual business expenses, then divides by the hours you realistically bill in a year. That gives the hourly rate you need to charge. Multiplying the hourly rate by 8 gives a matching day rate.
How to use it
- Enter the annual income you want to earn.
- Enter your annual business expenses.
- Enter your billable hours for the year, then read your hourly and day rates.
Worked example
Income 60,000, expenses 10,000, 1,000 billable hours: hourly rate 70, day rate 560.
What hourly rate covers 60,000 income plus 10,000 expenses over 1,000 billable hours?
The hourly rate is 70, and the day rate is 560. Add 60,000 and 10,000 to get 70,000, divide by 1,000 billable hours to get 70 per hour, and multiply by 8 for a day rate of 560.
Frequently asked questions
What counts as billable hours?
Only hours clients actually pay for. Admin, marketing, and holidays do not count, so a full-time year is often far fewer than 2,000 billable hours.
Should I include taxes in expenses?
Yes, include an allowance for taxes and other costs in expenses so your rate covers your real outgoings.