Freelance Rate Calculator

| Added in Business Finance

What is a Freelance Rate and Why Should You Care?

Your freelance rate is the hourly fee you charge clients for your services. Getting it right means you're fairly compensated while staying competitive. Set it too low and you'll be overworked and undervalued. Too high and you might struggle to attract clients.

Finding that sweet spot ensures you can cover your expenses, save for the future, and build a sustainable freelance career.

How to Calculate Your Freelance Rate

The formula accounts for your income goals and business expenses:

[\text{Freelance Rate} = \frac{\text{Desired Yearly Salary}}{\text{Weekly Hours} \times \text{Weeks Per Year}} \times 1.30]

Where:

  • Desired Yearly Salary is your target annual income
  • Weekly Hours is your average billable hours per week
  • Weeks Per Year is how many weeks you'll work (accounting for vacation)
  • 1.30 is the expense multiplier (30% for taxes and business costs)

Calculation Example

Calculate a rate for:

  • Desired Salary: $80,000
  • Hours Per Week: 35
  • Weeks Per Year: 48 (4 weeks vacation)

Step 1: Calculate total working hours:

[35 \times 48 = 1,680 \text{ hours}]

Step 2: Divide salary by hours:

[\frac{80,000}{1,680} = 47.62]

Step 3: Apply expense factor:

[47.62 \times 1.30 = 61.91]

Your recommended rate is $61.91/hr.

Rate Comparison Table

Desired Salary Hours/Week Weeks/Year Rate
$50,000 40 50 $32.50/hr
$60,000 35 48 $46.43/hr
$80,000 35 48 $61.91/hr
$100,000 40 48 $67.71/hr

Tips for Rate Adjustments

  1. Increase rates when your schedule fills up
  2. Charge premium rates for specialized skills or rush work
  3. Communicate value when discussing rates with clients

This formula ensures you're covering expenses while building a profitable freelance business.

Frequently Asked Questions

The rate is calculated by dividing your desired yearly salary by total working hours, then multiplying by 1.30 to add a 30% buffer for expenses.

Freelancers must cover self-employment taxes, health insurance, software subscriptions, equipment, and other business expenses that employers typically pay for employees.

The 30% factor is a common starting point. You may need higher margins if you have significant equipment costs, or lower if you have minimal overhead.

Use this as a baseline. You may charge more for specialized skills, rush projects, or difficult clients, and occasionally less for long-term contracts or passion projects.