Hourly Rate Calculator
Convert between hourly, daily, weekly, and annual rates — factoring in billable hours, expenses, and your target profit margin. See what you actually need to charge.
Rate conversions
To hit your target
With a 20% profit margin, 15% expenses, and 75% billable time, you need to charge:
This generates $140,625 in annual revenue to cover $16,875 in expenses, $24,193 in estimated taxes, and leave you with $71,432 take-home.
Worked example
At $75/hr with 75% billable time, you'll work 30.0 billable hours per week and earn $112,500/year gross. After 15% expenses and ~25.3% taxes, your take-home is approximately $71,432/year.
How this calculator works
The calculator starts with your desired hourly rate and applies your working schedule (hours/week × weeks/year) to find your annual gross income. It then factors in billable percentage (not all hours are productive), business expenses, and your target profit margin to calculate the rate you actually need to charge.
What affects your rate
- Not all hours are billable — admin, marketing, and learning take time
- Business expenses (insurance, software, hardware) must be covered by your rate
- Taxes are not deducted from this rate — you must set aside ~25–35% for taxes
- Vacation and sick days reduce your effective annual billable hours
Frequently asked questions
How do I calculate my hourly rate as a freelancer?
Add your desired annual income to your annual business expenses and tax set-aside, then divide by your billable hours. For example, to earn $80,000 a year with $20,000 in expenses and ~1,200 billable hours, you'd need to charge roughly $83/hour. This calculator does that conversion for you.
What percentage of hours should be billable?
Most freelancers bill 60–75% of their working hours. The rest goes to admin, marketing, learning, and business development. New freelancers often bill less (40–50%) while established ones can reach 80%+.
How many billable hours should I assume per year?
A realistic figure is 1,000–1,500 billable hours per year — not the full 2,080 in a standard work year — because admin, marketing, sales, learning, and time off all consume hours.
How much should I set aside for taxes?
In the US, self-employment tax is 15.3% (Social Security + Medicare) on net earnings, plus federal income tax (10–37% depending on bracket). Most freelancers set aside 25–35% of gross income for total tax obligations.
Should my hourly rate include business expenses?
Yes. Software subscriptions, equipment, insurance, marketing, and other business costs must be covered by your rate. If they're not built in, you'll effectively be paying for them out of your own take-home pay.
Why does an hourly rate sometimes equal less than a salary?
Employees receive paid vacation, sick leave, benefits, and employer tax contributions that freelancers don't get. To match a salary fairly, your hourly rate must compensate for those missing benefits and your non-billable time.
Should I charge hourly or by project?
Both work. Hourly billing is simpler and lower risk. Project-based billing rewards efficiency but requires accurate scope estimation. Many freelancers use hourly rates as a baseline to price fixed-fee projects.