Consulting rate target
A freelancer wants $90,000 income, bills 25 hours per week and plans 6 weeks off.
- Income target: $90,000
- Billable hours: 25/week
- Weeks off: 6
- Overhead buffer: 35%
Pricing
Freelance Rate Calculator
Estimate the hourly rate needed to hit an annual income target after overhead and billable time.
Pricing
Freelance Rate Calculator
Use this to price consulting, freelance, agency or contractor work without forgetting non-billable time.
How to use this calculator
Start with conservative inputs, copy the result, then test a best-case and worst-case version. For production decisions, compare the estimate against actual accounting, analytics and payment data.
Best used for
Use this to set a sustainable hourly rate that accounts for billable time, downtime and business overhead.
Formula
A sustainable freelance rate depends on billable hours, not total working hours. The overhead buffer keeps business costs from silently reducing take-home income.
Formula
Hourly rate = annual income target * (1 + overhead buffer) / annual billable hours.
Example
How to read the result
- The hourly rate should be based on billable hours, not total working hours.
- A higher overhead buffer is safer for freelancers with tools, insurance, tax and unpaid admin work.
- Project pricing should include scope risk above the hourly cost floor.
Common mistakes
- Setting rates from salary divided by 2,080 hours even though not all hours are billable.
- Forgetting unpaid sales calls, proposals, admin and learning time.
- Ignoring late payments and collection risk.
FAQ
Why use billable hours instead of working hours?
Freelancers spend time on sales, admin, learning and support that cannot always be invoiced. Billable hours are the revenue-producing base.
Should taxes be included?
Use the overhead buffer for taxes and business expenses, then verify the final rate with local accounting advice.
Can I use this for project pricing?
Yes. Estimate the hourly rate first, then multiply by expected hours and add risk buffer for project scope.
Important limits
- Actual take-home income depends on tax rules, collection rate and unpaid time.
- Do not set rates only from cost; market positioning and value also matter.