Freelance target hourly rate calculator
A freelance hour must cover unpaid administration, leave, expenses and tax reserves as well as take-home pay.
%
Target hourly rate
80.00
- Eight-hour day rate
- 640.00
- Annual revenue needed
- 92 000.00
- Annual billable hours
- 1150
Show the working
- Desired annual take-home income = 60 000
- Annual business expenses = 12 000
- Tax and contribution reserve = 25
- Working weeks per year = 46
- Billable hours per week = 25
- gross_income = 60 000/(1-25/100) = 80 000
- Annual revenue needed = 80 000+12 000 = 92 000
- Annual billable hours = 46*25 = 1150
- Target hourly rate = 92 000/1150 = 80
- Eight-hour day rate = 80*8 = 640
Values are shown to six significant figures here; the arithmetic itself runs on exact fractions and is only rounded where a number is printed.
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The formula
- rate = (take-home / (1 - tax reserve) + expenses) / billable hours
Tax rules differ; the reserve is an editable planning input, not tax advice.