Business & SaaS · free calculator
Freelance effective hourly rate calculator
Translate a desired take-home into a billable hourly rate after taxes, benefits, unpaid time, and overhead. The math most freelancers underprice into a corner.
Minimum hourly rate
$1,043 day rate at 8 billable hours
Revenue required
$12,500 per month
Show the work
- Annual costs before tax reserve$108,000
- Working weeks46
- Annual billable hours1,150
- Rate formularevenue / billable hours
Your freelance rate has to fund the whole business
A good freelance hourly rate starts with desired take-home pay, then adds the costs that a paycheck usually hides:
- Tax reserve
- Benefits
- Software, equipment, insurance, and bookkeeping
- Vacation, sick time, and unpaid weeks
- Non-billable sales and admin work
The formula is:
Required revenue = (take-home + benefits + overhead) / (1 - tax reserve)
Then divide that revenue by realistic annual billable hours. The result is the minimum rate before profit cushion or market positioning.
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