Freelance Rate Calculator
Find the ideal hourly or daily rate to cover your expenses and reach your income goal.
Results are estimates for informational purposes only and do not constitute financial, legal, or medical advice.
Use this freelance rate calculator to find the minimum rate you need to charge to reach your financial goals. Enter your target net income, annual business expenses, tax rate, weeks off per year, and billable hours per week — and instantly get your minimum hourly rate, day rate, weekly and monthly freelance rates.
As a freelancer in the UK or US, your rate must cover everything an employer normally pays: National Insurance or self-employment tax, equipment, software, accounting, and paid vacation. A common rule of thumb: your freelance hourly rate should be at least 1.5–2× the equivalent employee hourly wage. Use this tool to verify you're not undercharging.
Frequently Asked Questions
What is a billable hour?
A billable hour is time you can invoice a client for — actual work on their project. As a freelancer, not all your working time is billable: you also spend time on business development, marketing, admin, accounting, invoicing, and professional development. Most freelancers are billable for only 60–75% of their working hours. If you work 40 hours/week but only bill 25, your true hourly rate needs to cover the full 40.
What is a freelance day rate?
A freelance day rate is the amount you charge for a full working day, typically 7–8 hours. Day rates are common in IT contracting, design, consulting, and project-based work in the UK. A day rate is simply your hourly rate × billable hours per day (usually 7 or 8). For example, at £75/hour × 8 hours = £600/day. UK IR35 rules affect day-rate contractors working through limited companies — check your IR35 status before setting rates.
How do I calculate my freelance rate for the UK market?
For UK freelancers: (1) Calculate your target gross income = net income goal ÷ (1 − income tax − National Insurance rate). (2) Add annual business expenses (software, equipment, accounting). (3) Divide by billable hours per year (weeks worked × billable hours/week). Typical UK freelance rates: junior developers £300–450/day, mid-level £450–650/day, senior £650–900/day. Designers: £200–500/day. Copywriters: £150–400/day.
Why is my freelance rate higher than an employee salary?
As a freelancer you cover all costs an employer normally pays: employer National Insurance (13.8% in UK), pension contributions, equipment, software, accounting fees, office costs, and paid holiday. You also have no income during gaps between contracts and no sick pay. A freelancer earning £60,000 equivalent needs to charge for roughly 1,440–1,600 billable hours vs an employee's 2,080 hours — plus cover all overhead. This is why a freelance rate of 1.5–2× employee salary is typical.
How many billable hours per year is realistic?
With 4 weeks off and 30 billable hours/week, you get ~1,440 billable hours/year. In practice, also account for sick days (average 5–10 days/year), slow periods between clients, and non-billable admin time. Most experienced freelancers in the UK and US plan for 1,000–1,400 truly billable hours annually — roughly 60–70% of a standard working year.
What tax rate should I use as a UK freelancer?
For UK sole traders: Income Tax (20% basic rate up to £50,270, 40% higher rate above) + Class 4 National Insurance (9% on profits £12,570–£50,270, 2% above). Total effective rate is roughly 25–30% at moderate incomes. For limited company contractors: Corporation Tax (19–25%) + salary and dividend extraction — effective rate 20–30%. Use HMRC's tax calculator for your specific situation.
What tax rate should I use as a US freelancer?
US self-employed freelancers pay: Self-employment tax (15.3% on net earnings up to Social Security limit, 2.9% above) + Federal income tax (10–37% depending on bracket). You can deduct 50% of self-employment tax from income. At $80,000 net income, expect ~30–35% effective total tax rate. Also account for state income taxes (0–13% depending on state). Many US freelancers set aside 25–30% of income for taxes.
Should I charge by the hour or by the project?
Project-based pricing is often more profitable: clients pay for value delivered, not time spent, and you're rewarded for working efficiently. Use the hourly rate as your baseline to estimate project budgets. As you gain experience, shifting to value-based pricing (charging based on the business outcome you deliver) typically increases earnings by 30–100%. Start with hourly to build confidence, then move to fixed-price or retainer arrangements.
How do I account for unpaid gaps between projects?
Build a buffer into your rate. If you expect to be fully booked 10 months out of 12, divide your annual income target by 10 months of billable work rather than 12. Alternatively, use the "weeks off" input to account for expected downtime. Most freelancers in competitive markets have 1–2 months of unbilled time per year; those just starting may have 3–4 months. A 3-month emergency fund is the standard recommendation before going full-time freelance.
How often should I review my freelance rates?
Review your rates at least annually, and raise them when: you're fully booked consistently, your skills have significantly improved, inflation has eroded your purchasing power, or market rates in your niche have risen. A 5–10% annual increase is standard in most markets. Existing clients typically accept a rate increase of 10–15% with 30–60 days notice, especially if your work quality is high.