Freelance Hourly Rate Calculator
Calculate a freelance hourly rate from annual compensation, overhead, billable hours, and target operating margin. Includes a transparent worked example.
02 / YOUR RESULT
Start with your numbers.
The example calculates when this page loads.
How the calculation works
Annual revenue target = (owner compensation + overhead) / (1 - operating margin / 100). Hourly rate = annual revenue target / (working weeks × weekly billable hours).
A calculation you can check.
An annual compensation target of $72,000 plus $18,000 overhead requires $105,882.35 revenue at a 15% operating margin. Across 46 weeks with 25 billable hours each, the rate is $92.07 per hour.
When to use this calculator
Use this freelance hourly rate calculator to establish a cost-based rate floor for your practice. Enter the compensation you want the business to pay you before personal taxes, then the separate operating costs. Deduct holidays and time off from working weeks. Billable hours are the hours clients pay for, not all the hours you spend running the business. This distinction matters more than small adjustments to your hourly price.
Assumptions and limits
The operating margin is defined here after the entered owner-compensation target and overhead. Do not enter the same compensation again as overhead. Income taxes, benefits, unpaid invoices, and equipment replacement need your own allowances. A sustainable rate also depends on whether clients buy enough billable time; use actual utilization data to challenge your assumptions.
Before you use the result.
Should I enter 40 billable hours every week?
Only if 40 hours are realistically billable. Sales, administration, learning, and time between projects often reduce the hours available to charge.
Is the compensation target after tax?
No. This model does not calculate personal or business tax. Enter a pretax compensation target and plan taxes separately.
Can I quote a fixed project from this rate?
Multiply the rate by a realistic effort estimate as a starting point, then consider scope uncertainty, deliverables, and value.
Calculator inputs are processed on your device and are not saved by this tool or sent to MNMVL. The optional CSV download includes your current inputs and result. These are simplified business planning models, not accounting, tax, or investment advice.