Hourly Rate Calculator

Currency

Income you want a month

Business costs a month

Software, hardware, connectivity, accounting.

Billable hours a week

Weeks off and idle a year

Tax, %

Result

Hourly rate

$1,887.14

An eight-hour day

$15,097.13

Annual turnover

$2,170,212.77

Billable hours a year

1,150

Billable hours a month

95.8

Tax for the year

$130,212.77

This result is informational only and is not professional advice.

Why your rate is not your salary divided by 160

Works out the hourly rate a freelancer has to charge to reach a target monthly income after costs, tax and unbillable weeks.

The usual mistake is dividing the wanted monthly income by 160 hours. That answer is too low twice over: not every working hour is billable, and the invoice has to carry tax and business costs the salary never showed.

This runs the calculation the other way round. It starts from the money you want to keep, adds the costs and the tax, and divides by the hours you can genuinely bill in a year.

What this calculator shows

The hourly rate and the equivalent day rate
How many hours a year and a month you can actually bill
The annual turnover and the tax inside it

What to keep in mind

Tax is charged on turnover, which fits a simple self-employed or flat-rate regime. Profit-based regimes need the costs deducted first.
Billable hours are hours a client pays for. Sales calls, admin and invoicing are unbillable and belong in the weeks-off or hours-a-week figure.

FAQs

How many hours a week can be billed realistically?

Twenty to thirty for most solo freelancers. Everything else goes on finding work, answering messages, invoicing and the parts of a project nobody pays for separately.

Why include weeks off?

Because there is no paid leave. Six weeks of holiday and dead time is a ten percent cut in annual capacity, and the rate has to carry it.

Should equipment be in the costs?

Yes, spread over its life. A laptop that lasts three years is a monthly cost, not a one-off shock.

What is a day rate?

Eight hourly rates here. In practice a day rate is often quoted slightly lower, because a full booked day costs the client the whole day and costs you no switching time.

Worked example

150,000 a month in hand

Input: 150,000 target, 20,000 costs, 25 billable hours a week, 6 weeks off, 6 percent tax

Output: about 1,887 an hour

Note: That is 46 working weeks and 1,150 billable hours a year. Cut the billable week to 20 hours and the rate has to rise to about 2,360 for exactly the same income.

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Result

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