How to Calculate Your Freelance Hourly Rate
Many freelancers make the mistake of simply dividing their old salary by 2,000 hours. This fails to account for the "hidden" costs of being self-employed. To find your true rate, you must work backwards from your lifestyle goals.
1. Account for Non-Billable Time
In a typical 40-hour work week, you won't spend 40 hours on client work. Admin, marketing, invoicing, and pitching usually take up 25-40% of your time. Our calculator uses Billable Hours to ensure your rate covers the time you spend working "on" the business as well as "in" it.
2. The Tax and Benefit Gap
As a freelancer, you are responsible for both the employer and employee portions of social security, health insurance, and retirement contributions. We recommend setting aside at least 25-30% of your gross income for taxes.
Using this tool helps you set a rate that isn't just "competitive," but actually sustainable for your long-term career.