Freelance Rate Calculator

What formula sets the minimum hourly rate?

The tool adds your target take-home income, business expenses and healthcare costs, then divides by (1 − tax rate ÷ 100) to get the gross income required. It divides that by billable hours per year, which is (52 − vacation weeks) × billable hours per week. With the defaults, $71,000 ÷ 0.85 = $83,529.41, and divided by 1,200 hours that is $69.61 an hour.

Is tax applied to expenses and healthcare too?

Yes. The tool grosses up the whole sum of target income, expenses and healthcare by the tax rate. That is a conservative modelling choice, because it assumes you need pre-tax revenue to cover all three. If your expenses are tax-deductible in your situation, the actual requirement could be lower, and the tool does not model that.

What is the recommended rate?

It is the minimum rate × 1.2, a flat 20% buffer for slow periods or unpaid time. At the defaults $69.61 becomes $83.53. The buffer is fixed and cannot be changed in the tool.

How are billable hours and vacation weeks used?

Working weeks are 52 minus vacation weeks, with a minimum of one week. Billable hours per year are working weeks × billable hours per week, which is 48 × 25 = 1,200 by default. Billable hours are only the hours you can invoice, so enter fewer than your total working hours if part of the week goes to admin or finding work.

Can I enter zero vacation weeks or zero expenses?

Yes. Zero is accepted and used as zero. With 0 vacation weeks the default inputs give 1,300 billable hours and $64.25 an hour. A cleared box counts as 0 and is treated the same way. Billable hours per week cannot go below 1 (a 0 is raised to 1, which gives $1,740.20 an hour with the other defaults), and the tax rate is limited to the range 0–99%.

What is the daily rate equivalent?

It is the minimum hourly rate × 8, so the default is $556.86. It assumes an 8-hour billable day regardless of your weekly billable hours entry. If you bill fewer hours per day, quote a day rate based on your own hours.

Does the tool give tax or legal advice?

No. The tax rate is your own estimate, applied as a single flat percentage, and the tool knows nothing about your jurisdiction or business structure. Check the right figure with an accountant or tax adviser before relying on it.

Can I use this for project pricing?

The output is an hourly floor, not a project price. Multiplying it by an estimated number of hours is a starting point only, since the tool has no allowance for scope changes, revisions, or the value of the work to the client.