About this tool
New freelancers often price themselves by taking a salary they'd like to match and dividing it by the roughly 2,000 hours in a working year — then wonder why they're constantly behind, even fully booked. The math misses a fact every experienced freelancer learns the hard way: unlike a salaried job, not every hour you spend working is an hour you can bill. Time goes to invoicing, bookkeeping, marketing, unpaid discovery calls, and pitches that don't land — commonly cited estimates put the realistic billable share of a working week at 60-80%, not 100%. On top of that, a freelancer's rate has to cover business expenses and self-funded tax withholding that a salaried paycheck never has to touch.
This calculator works backward from the number that actually matters — the income you want to take home — through every one of those gaps. It subtracts your weeks off from the year, applies your billable percentage to what remains, adds your business expenses and an optional tax set-aside on top of your target income, and divides the total by your billable hours to land on an hourly (and daily) rate. The breakdown shows every step, so you can see exactly why the number lands where it does. Treat the result as a floor, not a finish line: it tells you what you need to charge to hit your numbers on paper, but the rate you actually charge should also reflect market research, your experience level, and what clients in your specific niche and region are really paying.
Frequently asked questions
Why isn't billable percentage 100%?
This is the single most common mistake new freelancers make, and exactly why this calculator exists: unlike a salaried job where every working hour is essentially "paid," freelancers spend real time on unpaid activities that don't generate revenue — finding and pitching new clients, invoicing and bookkeeping, responding to inquiries that don't convert, revisions beyond scope, professional development, and simple administrative overhead. Realistic estimates commonly cited by freelance-business resources put actually billable time at somewhere around 60-80% of total working hours, which is why treating 100% as billable would systematically undercharge and leave you working far more hours than your target income implies.
Should I include the tax set-aside percentage?
It's optional, but genuinely worth using if you're a self-employed freelancer, since unlike an employee whose employer withholds taxes automatically from each paycheck, freelancers in most places are responsible for setting aside their own tax payments (and sometimes additional self-employment-specific taxes) throughout the year. The exact percentage that's right for you depends heavily on your local tax rules, income level, and business structure — this tool applies whatever flat percentage you enter to your desired income as a simple estimate, not a substitute for actual tax advice from an accountant familiar with your specific situation.