Freelance Rate Calculator: Hourly and Daily Rate
Setting a freelance rate is not about dividing your desired salary by 2,080 hours. Freelancers typically bill only 25 to 35 hours per week because the rest of the working week goes to admin, marketing, and non-billable tasks. This calculator uses your annual income target (the take-home you want after business expenses), billable hours per week (default 30), weeks off per year (default 4), and monthly business expenses to find the gross revenue you need to earn. Dividing by total billable hours gives you the required hourly and daily rates. The income target in this calculator is pre-tax: you will need to set aside roughly 25 to 30 percent of gross revenue for federal and state income tax plus self-employment tax. The IRS self-employed tax center and SBA financial management resources provide further guidance on tax obligations and financial planning for freelancers and independent businesses.
Formulas
Billable weeks = 52 - Weeks off
Total billable hours = Billable hours per week x Billable weeks
Annual business expenses = Monthly expenses x 12
Annual gross revenue needed = Income target + Annual business expenses
Required hourly rate = Annual gross / Total billable hours
Required daily rate = Hourly rate x 8
Important: These rates are pre-income-tax. Set aside approximately 25 to 30 percent of gross revenue for combined federal self-employment tax, federal income tax, and state income tax. Your actual tax burden depends on your filing status, deductions, and state.
How to use this calculator
- Enter your annual income target. This is the gross amount you want to earn before income and self-employment taxes; it is not a take-home or net figure.
- Enter the number of hours per week you realistically expect to bill to clients. For most freelancers 25 to 35 is accurate; adjust based on your actual experience.
- Enter weeks off per year, including vacation, sick time, and public holidays you choose not to work.
- Enter your total monthly business expenses so they are covered by your rate.
- Read your required hourly and daily rates from the output panel.
Frequently asked questions
Why use 30 billable hours per week instead of 40?
Freelancers rarely bill for every hour worked. Non-billable time includes client prospecting, proposal writing, invoicing, accounting, professional development, networking, and general administration. Industry surveys consistently find that full-time freelancers bill 25 to 35 hours per week on average. Using 30 as the default gives a realistic planning figure. Adjust down if you are newer to freelancing and expect heavier admin time.
What is the difference between a day rate and an hourly rate?
A day rate is simply your hourly rate multiplied by 8 hours. Many clients, particularly in creative fields, media, and consulting, prefer to hire on a day-rate basis for on-site work or project phases. Day rates make budgeting simpler for the client and reduce time-tracking friction. Always clarify with the client whether a day means exactly 8 hours or is used loosely.
What business expenses should I include?
Include all expenses the business incurs: professional liability or errors-and-omissions insurance, accounting and bookkeeping fees, software subscriptions (design tools, project management, invoicing), professional memberships, continuing education and courses, marketing and website hosting, home office costs (a proportionate share of rent, utilities, internet), and equipment purchases amortised monthly.
Does this calculator account for income tax?
No. Tax rates vary too widely by state, filing status, and deductions to include in a generic calculator. As a freelancer you will owe federal self-employment tax (approximately 14.13% on net SE income after the deductible portion) plus federal and state income tax. A rough planning buffer of 25 to 30 percent of gross revenue set aside for combined taxes is commonly recommended, but consult a tax professional for your specific situation.
When should I raise my rates?
Review your rate at least annually. Indicators that a rate increase is due include: your schedule is fully booked with little room for new clients, your skills or portfolio have grown significantly, your business expenses have risen, inflation has eroded purchasing power, or new clients are accepting your current rate without any negotiation. A rate increase of 5 to 15 percent per year is common for established freelancers with strong demand.
Official sources
- IRS Self-Employed Individuals Tax Center: www.irs.gov.
- U.S. Small Business Administration, Manage Your Finances: www.sba.gov.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.