Stop guessing your prices. Calculate a sustainable freelance hourly rate that covers your expenses, taxes, and desired salary. Perfect for developers, designers, and consultants.
One of the biggest mistakes new freelancers make is taking their previous full-time salary and dividing it by 2,080 (the standard number of work hours in a year). If you do this, you will effectively be taking a massive pay cut. Unlike an employee, you have to pay for your own health insurance, software subscriptions, self-employment taxes, and retirement savings. Our tool simplifies this process by helping you understand how to calculate freelance hourly rate based on your actual financial needs, not just a raw salary number. To truly master your freelance finances, consider using our To-Do List to track billable hours alongside your project tasks, ensuring every minute counts toward your income goals.
Whether you're a freelance rate calculator for developers building complex SaaS applications, or a graphic designer creating brand identities for startups, the financial principles remain identical. While market rates vary dramatically by industry—senior developers might command $150-250/hr while junior designers start at $35-50/hr—your personal minimum rate is determined by your actual expenses and financial goals. This calculator is intentionally industry-agnostic, ensuring that whether you're pushing pixels in Figma or deploying code to AWS, you never operate at a loss. For web developers specifically, don't forget to factor in time for client SEO optimization; our Meta Tag Generator can save hours on routine on-page SEO tasks, freeing up more billable time.
A simple freelance salary to hourly converter often lies by omission because it assumes you're working 40 billable hours weekly. In reality, even top-performing freelancers only bill 60-75% of their total working time. The remaining hours are consumed by administrative tasks, client prospecting, contract negotiations, professional development, and those inevitable gaps between projects. Ignoring this reality is why many freelancers burn out within 18 months.
To convert salary to freelance rate accurately, you must factor in operational overhead. We recommend the "Rule of Thirds": one-third for taxes and accounting, one-third for business expenses and savings, and one-third for your actual take-home pay. This tool performs that complex math instantly, revealing the true hourly rate needed to maintain your desired lifestyle while building a sustainable business.
Capacity planning separates thriving freelancers from struggling ones. You might target $100,000 in annual revenue, but if you can only bill 20 hours weekly due to childcare, education, or other commitments, your rate must be significantly higher to compensate. This tool functions as a strategic minimum billable hours calculator, working backward from your income goal and availability to establish your absolute pricing floor. Input your target salary, realistic weekly billable hours, and time-off needs to discover the lowest rate you can accept without operating at a loss.
1. Don't ignore the tax burden: Self-employment tax alone adds 15.3% on top of your federal income tax. Build this into your rate from day one to avoid painful surprises.
Yes, this tool is 100% free. You can run as many scenarios as you like to see how changing your billable hours or expense estimates affects your required hourly rate.
Billable hours are the hours you actually charge a client for. This excludes time spent on emails, marketing, accounting, or learning new skills. Most successful freelancers only bill about 60-70% of their total working time.
This calculator gives you a baseline hourly rate, which is essential even if you charge by the project. If you quote a fixed price of $500 but it takes you 20 hours, you're earning $25/hr. Knowing your minimum hourly rate helps you estimate profitable fixed-price quotes.
Employers pay for benefits, office space, hardware, and payroll taxes on top of your salary. As a freelancer, you bear these costs. To maintain the same standard of living, your hourly rate usually needs to be 1.5x to 2x higher than your equivalent hourly wage as an employee.
Absolutely. While we mention developers and designers often, this math applies to writers, virtual assistants, consultants, photographers, and any other service-based freelance business.
How to Calculate Freelance Hourly Rate the Right Way
Freelance Rate Calculator for Developers and Designers
The Truth About the Freelance Salary to Hourly Converter
Using the Minimum Billable Hours Calculator for Capacity Planning
Proven Strategies for Setting Your Freelance Rate
2. Account for revenue volatility: Freelancing is inherently feast-or-famine. Your hourly rate should generate enough surplus during busy months to sustain you through dry spells. Aim for a rate that covers 3-6 months of expenses in savings.
3. Value-based pricing starts with your floor: Once you know your absolute minimum hourly rate, use it as a foundation—not a ceiling. If a project delivers exceptional ROI for the client, price accordingly. Your floor simply ensures profitability.
4. Schedule annual rate reviews: As your expertise compounds and inflation erodes purchasing power, your rates should increase 10-15% annually. Run this calculation quarterly to stay ahead of market changes.
5. Track everything relentlessly: Use time-tracking apps integrated with this calculator to monitor your actual billable percentage. Most freelancers overestimate their efficiency by 20-30%.
Freelance Rate Calculator – FAQs