Hourly Rate Calculator
The Hourly Rate Calculator works backward from your desired annual income and business expenses to determine the hourly rate you need to charge, accounting for realistic billable hours.
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How This Tool Works
Enter your desired annual take-home income, business expenses, realistic billable hours per week, and planned weeks off to calculate your required hourly rate.
Formula & Method
Billable weeks = 52 − weeks off. Total billable hours = billable hours per week × billable weeks. Hourly rate = (desired income + annual expenses) ÷ total billable hours.
Example Calculation
Wanting $80,000/year with $10,000 in expenses, billing 25 hours/week, and taking 3 weeks off, you need to charge about $75.20/hour.
Frequently Asked Questions
Why aren't all 40 work hours billable?+
Freelancers and business owners spend real time on admin, marketing, invoicing, and finding clients — realistic billable hours are usually well below total working hours.
Should I include health insurance in expenses?+
Yes, self-employed individuals should include health insurance, retirement contributions, software, and other business costs in the expenses field for an accurate rate.
What if clients won't pay this rate?+
This is your target rate to hit your income goal — if the market won't support it, you may need to increase billable hours, reduce expenses, or adjust your income expectations.
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