Freelance Hourly Rate Calculator
The hourly rate a freelancer needs to match a salary — after unbillable time, holidays, overheads and the tax an employer used to handle.
The mistake is dividing a target salary by 2,080 hours.
How the freelance hourly rate calculator works
The mistake is dividing a target salary by 2,080 hours. A freelancer does not bill 2,080 hours: holidays, sick days, admin, sales and quoting all come out first, and 60 to 70% billable is a good year.
Then overheads and self-employment tax come off the top. A 90,000 salary equivalent commonly needs a rate near 100 an hour, not 43, and that gap is why freelancers underprice.
Formula: rate = (target + overheads) / (billable hours × (1 − tax))
Worked examples
| Inputs | Hourly rate needed | Note |
|---|---|---|
| 90,000 target at 65% billable | 114.55 | about 111 an hour |
| Higher billable share | 87.6 | the rate falls sharply |
| No overheads | 104.52 | still far above the naive rate |
FAQFrequently asked questions
How do I set a freelance rate?
Work backwards from the income you need, gross it up for tax, add overheads, and divide by the hours you will actually bill — not the hours you will work.
What billable share is realistic?
Sixty to seventy per cent in a good year. The rest goes to sales, quoting, admin, invoicing and the work that never becomes a project.
Why is my rate so much higher than a salary equivalent?
Because you are also paying for holidays, sick leave, pension contributions, equipment, insurance and the employer half of payroll tax.
Should I quote hourly or fixed price?
Fixed price rewards efficiency and hourly punishes it. Use this rate as the floor for pricing either way.
What about raizing rates on existing clients?
The arithmetic here gives you the number to justify it. Most freelancers are below their own calculated floor and have been for years.
Where these figures come from
- Corporate Finance Institute — EBITDA — why EBITDA is a non-GAAP measure with no single definition
- US SEC — Non-GAAP Financial Measures, Compliance & Disclosure Interpretations — the disclosure rules that exist precisely because EBITDA is not standardized
- US Securities and Exchange Commission — the US securities regulator
Last checked: September 2026. These are standard management-accounting definitions; where a term has no single agreed definition, the page says so.