Calculate your ideal hourly and project rates based on your desired income, expenses, taxes, and realistic billable hours.
Most freelancers undercharge because they forget about taxes, insurance, unbillable hours, and business expenses. This calculator works backward from your income goals to find the hourly rate you actually need to charge — accounting for everything that eats into your take-home pay.
The biggest mistake freelancers make is basing their rate on what employees earn. Employees get benefits, paid time off, and their employer covers half of payroll taxes. As a freelancer, you pay for all of that yourself.
The formula: (Desired Income + Expenses + Taxes + Profit Margin) ÷ Annual Billable Hours = Your Rate. Most freelancers can only bill 60-70% of their working hours — the rest goes to admin, marketing, and business development.
Pro tip: Always quote project rates instead of hourly when possible. As you get faster, hourly rates penalize efficiency. A project that takes you 5 hours but delivers $10,000 of value should not be billed at 5 × your hourly rate.