Free Freelance Rate Calculator

Enter your desired take-home income, billable hours per week and estimated tax rate to calculate the minimum hourly and daily rate you need to charge as a freelancer.

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Freelance Rate Calculator

Mr B says: Most new freelancers undercharge. Factor in taxes, unpaid admin time, and no sick leave before you quote. The number needs to cover all of that, not just replace your salary.

Desired annual take-home income

Billable weeks per year

Billable hours per week

Estimated tax rate (%)

Annual business expenses

Your minimum freelance rate

Gross income needed—

Minimum hourly rate—

Minimum daily rate (8hr day)—

Total billable hours / year—

This is a minimum rate. Factor in your market value, experience, and the rate clients in your niche expect. Charging above the minimum is the goal.

⚠️ This tool is for general guidance only and is not financial advice.

Why "annual salary ÷ 2,000 hours" undercharges

A common mistake when moving from employment to freelancing is dividing a target annual income by roughly 2,000 working hours (40 hours × 50 weeks) to get an hourly rate. That number badly understates what you actually need to charge, because as a freelancer almost none of your time is 100% billable — and none of your former employer's overhead costs have disappeared, they've just moved onto you.

What billable-hours reality actually looks like

Client work, admin, invoicing, marketing, proposals, tax and the inevitable gaps between contracts all eat into a working week without generating billable hours. Most freelancers find that 20–30 billable hours out of a 40-hour week is realistic, not 40. If you only bill for the hours you can actually charge a client for, your effective rate needs to be considerably higher than a simple salary-divided-by-hours calculation suggests.

Costs an employer used to absorb

Tax and ACC/self-employment contributions: No employer is withholding or matching these for you anymore.
Paid leave and public holidays: Time off is unpaid unless you've built it into your rate.
Equipment, software and insurance: Business costs that used to be provided are now yours to fund.
Gaps between contracts: Periods without paid work still need to be covered by the rate you charge while working.

Building all of this into your rate up front, rather than discovering the gap at tax time, is the difference between freelancing that's sustainable and freelancing that quietly pays less than the job you left.

Common questions

Freelance rate questions

How do I calculate my freelance hourly rate?

Add up your desired take-home income plus taxes and business expenses to get your required gross income. Divide by your total billable hours per year (weeks worked × hours per week). The result is your minimum rate. Most freelancers should add a margin above the minimum to account for market positioning.

How many billable hours should I assume as a freelancer?

Aim for 60–75% of your working hours being billable. A 40-hour working week rarely produces 40 billable hours once you account for admin, sales, networking, and professional development. 25–30 billable hours per week is realistic for many freelancers. Overestimating billable hours leads to systematically undercharging.

How do I account for tax as a freelancer?

Unlike employees, freelancers pay tax on gross income with no employer contribution. Set aside 25–35% of every invoice payment for tax (the exact rate depends on your country and income level). This calculator grosses up your target income by your estimated tax rate, so you can see what you need to earn before tax.

What is a reasonable freelance daily rate?

Daily rates vary enormously by industry, skill, location, and experience. A useful benchmark: multiply your equivalent full-time annual salary by 1.5–2x to account for lack of benefits, unpaid admin time, and irregular income. Use this calculator to find your minimum, then research market rates in your niche to set your actual rate.