How to set a freelance rate
Work backwards from the income you need to keep.
1
Set take-home pay
Use the annual amount you need after tax and expenses.
2
Add business costs
Include software, insurance, equipment and workspace.
3
Count billable hours
Be realistic about holidays, admin time and slow months.
What does this tool do?
A freelance rate has to fund business expenses and tax before it becomes take-home pay. Dividing the required revenue by realistic billable hours gives a floor rather than a target.
The Formula
Rate = [Take-home ÷ (1 − Tax rate) + Expenses] ÷ (Hours per week × Weeks per year)Frequently Asked Questions
Why use billable hours rather than total hours?
Admin, marketing and holidays are unpaid. Counting only billable hours keeps the rate realistic.
Should the rate include retirement savings?
Yes. Treat retirement contributions and health insurance as part of the take-home target or as business costs.