Work out the hourly and day rate you must charge to actually hit your target take-home — after expenses, tax, and all the hours you can't bill. The number is usually higher than people guess.
Most freelancers pick a rate by glancing at what others charge, or by taking their old salary and dividing by 2,080 hours. Both methods quietly underprice you, because they ignore three things employees never have to think about: you pay your own expenses, you pay more tax, and most of your working hours can't be billed. This calculator works backwards from the only number that matters — the money you actually want to keep — and tells you the rate that gets you there.
The formula:
Gross to invoice = (desired take-home + business expenses) ÷ (1 − tax rate)
Hourly rate = gross to invoice ÷ (billable hours per week × weeks worked)
Want $60,000 in your pocket, with $6,000 of expenses and a 25% effective tax rate? You need to invoice ($60,000 + $6,000) ÷ 0.75 = $88,000. Bill 25 hours a week for 48 weeks (1,200 hours) and that's a minimum rate of about $73/hour, or roughly a $587 day rate. The day rate is simply the hourly rate × 8.
This is the single biggest mistake in freelance pricing. A full-time employee is paid for all 40 hours a week. A freelancer is paid only for the hours they invoice — and a huge slice of self-employed time is unbillable: finding clients, writing proposals, invoicing and chasing payment, admin, taxes, learning, marketing, and the gaps between projects. In practice, most established freelancers bill only 20–30 hours of a 40-hour week, and that's on a good week.
If you set your rate as though you'll bill 40 hours × 52 weeks, you'll come up dramatically short the moment reality hits — because you'll actually bill closer to 1,200 hours a year, not 2,080. That's why this calculator defaults to 25 billable hours and 48 weeks: it bakes the non-billable reality in, instead of leaving you to discover it after the bills arrive.
As an employee, your employer quietly pays half of your social contributions. As a freelancer you pay both halves yourself — in the US that's the ~15.3% self-employment tax on top of income tax; most countries have an equivalent. Use a blended "effective tax rate" that includes income tax plus self-employment/social contributions. If you're unsure, 25–35% is a common range for self-employed people at moderate incomes — and it's safer to overestimate than to be surprised at tax time. (For a US-specific number, see the self-employment tax calculator.)
Everything you pay to run the business comes out before your take-home: software subscriptions, hardware, a co-working desk, professional insurance, an accountant, courses, a portion of your phone and internet. Add them up annually and put the total in the expenses field. They scale your required rate directly — $6,000 of expenses on 1,200 billable hours is $5/hour you must add just to break even on costs.
The calculator gives you both an hourly and a day rate (hourly × 8). Use the hourly rate for short tasks and ad-hoc work; use the day rate for longer engagements where clients want predictability. As you gain experience, you'll often move to project or value-based pricing — quoting a fixed fee for an outcome rather than hours. When you do, this hourly number becomes your floor: divide the project fee by the hours you expect to spend, and make sure it lands above your minimum rate. If it doesn't, the project is underpriced.
Run your real numbers above, treat the result as your floor, and quote with confidence. A rate that doesn't cover your take-home, expenses, tax and unbillable time isn't a business — it's a hobby you're paying for.
(Take-home + expenses) ÷ (1 − tax rate) gives the gross you must invoice; divide that by your billable hours per year (billable hrs/week × weeks worked).
Sales, admin, invoicing and marketing aren't billable. Most freelancers bill only 20–30 of a 40-hour week — hence the 25-hour / 48-week defaults.
Hourly for short tasks, a day rate (≈ hourly × 8) for longer engagements. The underlying requirement is identical.
If it doesn't cover take-home + expenses + tax across only your billable hours, yes — raise it or take fewer, better clients.