How the rate is calculated
Billable hours = Working days × hours per day × billable share
Hourly rate = Revenue needed ÷ Billable hours
Working days = 52 weeks × days per week − holiday days − public holidays − sick days.
Example with the default values: to take home 60,000 at a 25% effective tax rate, you need 80,000 of profit. Add 6,000 of costs and a 10% buffer: 94,600 of revenue. Working days = 260 − 20 − 10 − 5 = 225. At 8 hours a day and 65% billable, that's 1,170 billable hours, so the minimum rate is about 80.85 an hour, or about 647 a day.
Why freelance rates must be higher than salaries
A salaried employee on 60,000 a year earns about 29 an hour (60,000 ÷ 2,080 hours). A freelancer charging 29 an hour would end up far poorer, because:
- Not every hour is billable. Finding clients, writing proposals, invoicing, admin and learning take 25–40% of the week for most freelancers.
- No paid leave. Holidays, public holidays and sick days earn nothing.
- You pay the costs. Equipment, software, insurance, accounting and often both halves of social security contributions.
- Income is lumpy. Gaps between projects and late payments need a cash buffer.
A common rule of thumb is to charge roughly 1.5–2× the hourly equivalent of the salary you'd want as an employee. This calculator works it out from your own numbers instead.
Hourly, daily or project pricing?
| Model | Good for | Watch out for |
|---|---|---|
| Hourly | Unclear scope, ongoing support | Clients may question every hour; you earn less as you get faster |
| Daily | Consulting, on-site or embedded work | Define what a "day" means (hours, availability) |
| Fixed project | Well-defined deliverables | Scope creep: write a precise estimate with exclusions |
| Retainer | Steady monthly work | Set the hours included and what happens to unused time |
Whichever you use, the hourly figure here is your floor: below it, you're working towards less than your target income.
Charging clients in another currency
If you invoice abroad, set the rate in the client's currency, then check what actually arrives after platform fees and the exchange-rate markup with the exchange rate markup calculator. A 3% conversion cost on every payment is 3% off your rate.
Frequently asked questions
How much should I charge per hour as a freelancer?
What is a realistic billable percentage?
Should I include taxes in my rate?
How do I convert an hourly rate to a day rate?
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