Advanced rate calculator with tax estimation, business expenses, and savings goals. Find your true hourly rate.
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A common mistake new freelancers make is assuming they can bill 40 hours a week. In reality, you have 'Unbillable Time': sales calls, invoicing, marketing, and skill development. Most full-time freelancers average only 20-25 billable hours per week. Your hourly rate must be high enough to cover the unbillable hours.
We start with what you want to pocket (Net Income), add what the business costs to run (Expenses), add what the government takes (Tax), and divide by the limited hours you actually face clients.
Even if you work 60 hours, you likely won't *bill* more than 30-35 without burning out. Administrative tasks scale with client work. Stick to a conservative billable estimate (25-30h) to safeguard your sanity.
Beyond obvious hardware (Laptop, Phone), don't forget liability insurance, subscriptions (Adobe, Office, Zoom), legal fees, accounting software (Quickbooks/Xero), and health insurance premiums (which can be $500+/mo in some markets).
For the US, a safe 'Set Aside' is 30% of every check. This covers Federal Income Tax and Self-Employment Tax. In high-tax states (CA, NY) or countries (UK, parts of EU), you might need to set aside 40-50%. Always consult a CPA.
It's tempting, but dangerous. Low rates attract difficult clients who micro-manage. Instead, offer a small 'Introductory Discount' on the first invoice, but keep your standard rate on the contract to anchor your value.
Value pricing disconnects time from money. If you fix a $100,000 problem for a client in 1 hour, charging $100 is foolish. Value pricing would suggest charging $5,000 or $10,000 because the *result* is worth that much to the client.
A good rule of thumb is to raise rates for *new* clients every 3-6 months until you start getting significant pushback (>20% rejection rate). For existing clients, an annual 5-10% 'Cost of Living' increase is standard business practice.
A retainer is a recurring monthly fee where a client pays to reserve your availability (e.g., $2,000/mo for 20 hours). This provides stable cash flow and is often sold at a slight discount compared to ad-hoc hourly work.
No. You must work enough in your 48 working weeks to cover the 4 weeks you take off. This calculator automatically adjusts your hourly rate upwards when you increase your 'Weeks Off' input.
Generally, you pay for your own tools (Photoshop, IDE). However, if a client requires a specific tool just for their project (e.g., a specific CRM seat), you should bill that as a 'Pass-Through Expense' or ask them to provide the license.
Estimate an hourly rate from your income goals, expenses, and billable time.