Hey there Freelancers! 

Is this your first time freelancing or are you reassessing your current hourly rate? It can be difficult to set a rate, so one way to achieve it is to reverse engineer it based on your desired annual income.

We have a free tool that you can use to quickly learn how to establish the minimum hourly rate.

We have created this calculator, which is intended to be a rough guide, not a definitive one, and you can play with the parameters to your liking. Have fun!

Freelance Rate Calculator

Annual Income Goal ($): Business Expenses: Billable Hours per Year: Vacation Days per Year: Sick Days per Year: Desired Hourly Rate ($): Estimated Tax Rate (%):

Select Currency: US Dollar (USD) Euro (EUR) British Pound (GBP)

Calculate Rate

Estimated minimum required yearly income: $

Estimated working hours per year:

Estimated billable hours:

How Does The Calculator Work?

1. User Inputs:
   • Annual Income Goal: How much the freelancer hopes to earn in a year.
   • Business Expenses: The total annual business-related costs.
   • Billable Hours per Year: How many hours does a freelancer expect to bill clients.
   • Vacation Days: The number of vacation days the freelancer plans to take. The calculator assumes a standard working year of 52 weeks.
   • Sick Days: Days the freelancer anticipates not being able to work due to sickness.
   • Desired Hourly Rate: The freelancer’s target hourly rate.
   • Estimated Tax Rate: The percentage of income set aside for taxes.
2. Adjusting for Time Off:
   • Net Billable Hours: Subtract vacation days and sick days from the total billable hours to get the effective working hours.
3. Calculating the Minimum Hourly Rate:
   • Hourly Rate: The minimum hourly rate required to meet the annual income goal and cover business expenses is calculated by dividing the total financial goal (income goal + business expenses) by the net billable hours.
4. Adjusting for Desired Hourly Rate and Taxes:
   • The calculated hourly rate is then adjusted to account for the freelancer’s desired hourly rate and estimated tax rate.
5. Currency Conversion:
   • Users can select their preferred currency (USD, EUR, GBP) through a dropdown menu.

FAQs