How to use this tool
Enter your desired annual income, monthly business expenses, tax percentage, billable hours per week, vacation weeks and profit margin. Your rates update instantly with every change โ no submit button needed.
Once you have your baseline rate, compare it against the wider market. Your calculated rate protects your income and business costs โ the market tells you how to position and package it.
Pricing tips
- โNever base your rate only on employee salary maths.
- โInclude admin, sales, marketing and quiet weeks in planning.
- โFor fixed projects, add a scope buffer and define revision limits.
- โReview prices every few months as demand and expenses change.
- โA higher rate with fewer clients is often healthier than a low rate with many.
Key pricing formula
รท (1 โ tax rate)
ร (1 + profit margin)
รท Annual billable hours
= Your hourly rate
Related Tools
How to Calculate Your Freelance Hourly Rate
The correct formula is: (Annual income + Annual expenses) รท (1 โ Tax rate) รท Billable hours per year. The key step most freelancers miss is accurately estimating billable hours โ which is rarely more than 1,000โ1,400 per year once you subtract vacation, bank holidays, admin time and business development.
Enter your income goal, monthly expenses, expected tax rate and realistic billable hours above. The calculator does the rest instantly.
What counts as a billable hour?
A billable hour is time you can charge a client for directly โ design work, development, consulting, writing. Time spent on proposals, emails, invoicing, CPD and business admin is non-billable and must be factored into your rate, not ignored.
| Freelancer Type | Typical Billable Hours/Year | Reason |
|---|---|---|
| New freelancer (heavy sales) | 800โ1,000 | High admin and client-finding time |
| Established freelancer | 1,000โ1,300 | Balanced work/admin ratio |
| Specialist with repeat clients | 1,300โ1,500 | Minimal sales overhead |