Business tools
Freelance Rate Calculator
Estimate a sustainable freelance hourly rate from income goals, billable hours, overhead, taxes, and profit buffer.
Interactive calculator
Price freelance work from annual income goals
Work backward from the annual income you want to earn, then account for overhead, taxes, and a profit buffer to estimate a sustainable hourly and day rate.
Visual breakdown
Revenue target breakdown
This mix shows how the target revenue is split across the income goal, operating overhead, tax reserve, and profit buffer.
Take-home goal
$120,000
50% of total
Overhead
$36,000
15% of total
Tax reserve
$60,000
25% of total
Profit buffer
$24,000
10% of total
Results
Target hourly rate
$209
Suggested day rate
$1,670
Annual revenue target
$240,000
Billable hours
1,150
How to use it
- 01Enter the annual income you want the business to support.
- 02Set realistic billable hours per week and billable weeks per year.
- 03Add reserve percentages for overhead, taxes, and profit buffer to estimate sustainable hourly and day rates.
Result guide
- Target hourly rate is based on annual billable hours rather than total hours worked.
- Annual revenue target includes the added room needed for business costs and reserves.
- Day rate is a simple 8-hour translation of the hourly figure for proposal pricing.
About this calculator
Freelancers often underprice because they start from salary thinking instead of business math. The right rate has to cover not only personal income but also taxes, overhead, and downtime.
A useful calculator should begin with the annual outcome someone wants, then work backward through realistic billable capacity instead of assuming every work hour can be invoiced.
Frequently asked questions
Why do billable hours matter so much?
Because freelancers rarely bill every hour they work. Sales, admin, revisions, and downtime all reduce the hours that actually generate revenue.
Why include a tax reserve here?
Because pricing without a tax reserve can make a headline rate look fine while leaving too little net income after taxes.
Can this work for consultants too?
Yes. The same back-solving logic applies to many independent service businesses, not just traditional freelancers.
Method and limitations
This calculator uses the formula and assumptions described on this page. We do not claim independent professional review. Direct references will be listed here when they support a specific rule or data source used by this calculator.
Results are estimates for general information. Verify current rules and assumptions before making financial, tax, or health decisions.
Read our Editorial and Verification Policy →Related calculators
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