Your Numbers
$
$
%
What You Should Charge
Minimum Hourly Rate
$0
to hit your income goal after taxes & expenses
Working weeks/year—
Total billable hours/year—
Gross income needed (before tax)—
Income + expenses + tax total—
Why This Math Matters
Most new freelancers calculate their rate by dividing their old salary by 2,080 hours (40hrs × 52 weeks) — but this massively undercharges, because freelancers don't bill 40 hours a week. Time spent on admin, marketing, proposals, and unpaid client communication isn't billable, and most freelancers only bill 20-30 hours per week even when working full-time.
This calculator works backward from your real take-home goal: it adds back self-employment taxes (which W-2 employees don't pay directly), business expenses (software, insurance, equipment), and accounts for unpaid vacation time — since freelancers don't get PTO unless they build it into their rate.
Common Freelance Pricing Mistakes
- Pricing based on what you'd accept, not what you need — your rate should be built from your actual financial requirements, not anchored to a client's budget.
- Forgetting non-billable time entirely — proposals, admin, learning, and client communication often eat 30-50% of total working hours.
- Not raising rates for existing clients — many freelancers undercharge for years because they're uncomfortable raising rates with long-term clients, even as their skills and market value grow.
- Underestimating true business expenses — software subscriptions, insurance, equipment, and self-employment tax add up to more than most new freelancers initially expect.
Frequently Asked Questions
How many hours per week do freelancers actually bill? ▼
Most full-time freelancers report billing somewhere between 20-30 hours per week, even when working what feels like a standard 40-hour work week, since significant time goes toward unpaid tasks like client acquisition, invoicing, and professional development.
Should I charge hourly or project-based rates? ▼
Project-based (value-based) pricing often allows you to earn more per hour of actual work, since clients pay for the outcome rather than your time, and it rewards efficiency rather than penalizing it. Hourly rates are simpler to calculate and justify, especially for newer freelancers or open-ended scope work.
How often should I raise my freelance rates? ▼
Many experienced freelancers review and adjust rates annually, factoring in inflation, skill growth, and demand for their services. New clients are a natural opportunity to test higher rates; raising rates with existing clients usually warrants advance notice (30-60 days) as a professional courtesy.