How the calculator works
Most freelancers price too low because they divide what they want to earn by 40 hours a week, 52 weeks a year. That forgets three things: tax, business costs, and the hours you can't bill. This calculator works backwards from your take-home pay.
A worked example
Say you want to take home 60,000 a year, your business costs are 6,000, your tax rate is 25%, you take 6 weeks off, you work 40 hours a week and can bill 60% of them, with a 10% buffer.
- Before tax you need (60,000 + 6,000) ÷ 0.75 = 88,000. With the 10% buffer: 96,800 to bill in the year.
- Billable hours: 46 weeks × 40 hours × 60% = 1,104 hours.
- Hourly rate: 96,800 ÷ 1,104 ≈ 87.70, so about 88. Day rate: 87.70 × 8 ≈ 701.
Compare that with the naive 60,000 ÷ 2,080 hours ≈ 29 an hour. The gap is why so many freelancers feel busy and still short of money.
What to put in each box
Business costs
Software subscriptions, equipment and its replacement, a desk or studio, insurance, accounting, phone and internet, training, and travel you can't bill to clients.
Share of time you can bill
Time spent on sales, quotes, invoicing, email, learning and your own marketing is real work but nobody pays for it. Many freelancers bill between half and three quarters of their working hours. Track a few weeks to find your own number.
Buffer
A buffer covers quiet months, late payers and the occasional job that takes longer than planned. Without one, one bad month can wipe out your savings.
Hourly, day rate or project price?
Your hourly rate is your floor, not necessarily what clients see. For defined work, quote a project price or a monthly package built from your rate, so clients pay for the result and you aren't punished for working fast. Use the quote generator to write it up, or the social media pricing calculator for monthly retainers.