What Should You Charge as a Freelancer?

The most common freelance pricing mistake is dividing a target salary by 2,080 hours (40 hours × 52 weeks) and charging that. It's how freelancers quietly underprice themselves into exhaustion. The reality: you don't bill 40 hours a week, you don't work 52 weeks a year, and you pay your own taxes, expenses, and benefits. Your real rate has to cover all of it. This calculator builds your rate from the bottom up — starting with what you actually want to take home, and working backward through everything that eats into it.

How the Real Rate Is Calculated

Three realities blow up the naive calculation. First, billable hours: a full-time freelancer might only bill 25 of 40 working hours — the rest goes to admin, marketing, invoicing, and email. Second, working weeks: subtract holidays, sick days, and downtime, and 52 becomes more like 46. Third, tax and expenses: as a freelancer you cover your own income tax, self-employment tax or super, software, and insurance. Ignore these and you'll earn far less than you planned.

Why the Naive Rate Fails

• You bill maybe 60% of your working hours — the rest is running the business
• You lose weeks to holidays, illness, and gaps between clients
• You pay both halves of self-employment tax plus your own retirement contributions
• You fund your own tools, insurance, and equipment that an employer would have covered
• You have no paid leave — every day off is a day unpaid

Stack these up and the rate you truly need is often 1.5× to 2.5× the naive salary-divided-by-2080 figure. This calculator shows both so the gap is impossible to ignore.

How to Use This Calculator

Enter your desired annual take-home (what you actually want in your pocket), your annual business expenses, your realistic billable hours per week, your working weeks per year after time off, and your combined tax and self-employment set-aside percentage. You'll get the hourly rate you need to charge, alongside the naive rate for comparison, plus day-rate and project-rate equivalents. Treat the result as your floor — round up from it, never down.

Worked Example

A freelancer wants $80,000 take-home, has $10,000 in expenses, bills 25 hours a week over 46 working weeks, and sets aside 30% for tax. Pre-tax income needed is $80,000 ÷ 0.7 = $114,286; plus expenses that's $124,286 to earn across 1,150 billable hours — an hourly rate of about $108. The naive rate ($80,000 ÷ 2,080) is just $38. Charging $38 would leave this freelancer earning less than half their goal after tax and unpaid time — the exact trap the calculator exists to prevent.

Setting Your Rate in Practice

• This is your floor, not your price: it's the minimum to hit your goal — charge more if the market and your value allow
• Price on value, not just time, for high-impact work — outcomes are often worth far more than hours
• Raise rates with experience: your first rate shouldn't be your rate three years in
• Build in a buffer for slow periods — feast-or-famine is real in freelancing
• Consider fixed-project pricing once you know your hourly floor, so efficiency rewards you instead of penalizing you

Plan the Rest of Your Freelance Finances

See what your rate nets after tax with the take-home pay calculator, compare freelance versus employment offers with the salary-to-hourly calculator, and if your income is variable, size your emergency fund to cover the quiet months. Invoicing clients? The VAT/GST calculator helps with tax on invoices.

Frequently Asked Questions