Freelance Hourly Rate Calculator

Most freelancers undercharge because they price off a salary, not reality. Enter your income target, costs and how many hours you can actually bill — this gives you the hourly rate you genuinely need.

Free vs paid — when to upgrade

What this free tool is great for: a quick, one-off job with no signup — it runs entirely in your browser, so nothing leaves your device and there's nothing to manage.

Its honest limit: it's a one-off calculation in your browser — it doesn't save your scenarios, update as your real numbers change, or connect to your live accounts, so you re-enter the figures every time and can't watch how they move.

Where doola does more: Once you've set your rate, the boring part is the business behind it — formation, banking and bookkeeping. A service like doola sets up and runs that side so you can bill.

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Why freelancers systematically underprice themselves

The most common freelance mistake is setting a rate by glancing at what a salaried employee earns for similar work and dividing by the hours in a week. It feels reasonable and it's almost always far too low. A freelancer is not an employee — you carry costs and risks an employer would normally absorb, and you can't bill anywhere near every working hour. This calculator exists to replace that flawed mental shortcut with the real maths, so you set a rate that actually sustains a business rather than one that slowly bankrupts you while you stay busy.

The employee-salary trap

When someone earns a salary, their employer quietly pays for a lot on top of it: payroll taxes, health cover, paid holiday, sick days, equipment, software, a pension contribution, and the downtime between projects. As a freelancer, every one of those costs is yours. So matching a salaried worker's take-home by charging their hourly-equivalent rate leaves you drastically short, because you've ignored the entire iceberg of costs sitting beneath their salary. Your rate has to cover not just your desired income, but everything an employer would otherwise have provided — which is why a sustainable freelance rate looks shockingly high next to an equivalent salary, and rightly so.

Billable versus non-billable hours

Here's the number that breaks most freelance budgets: you cannot bill forty hours a week. A large chunk of your time goes to work you can't charge for — finding clients, sending proposals, invoicing, admin, marketing, learning, and the inevitable gaps between projects. Many full-time freelancers bill only around half their working hours, sometimes less. That means your rate has to earn a full living from those billable hours alone, because the non-billable ones are the unpaid cost of running the business. Divide your target income by a realistic billable-hours figure, not your total working hours, or you'll set a rate that only works in a fantasy where every hour is paid.

The true cost base you have to cover

Before you even reach profit, your rate has to clear a stack of costs a salaried worker never thinks about. Self-employment and income taxes take a meaningful slice. Software subscriptions, hardware, a workspace, insurance, and professional development all come out of your pocket. There's no paid holiday, so every week you take off is a week you earn nothing — which means your working weeks have to fund your time off too. Add it all up and the gap between "what I want to take home" and "what I must charge" is large. The rate that ignores this base isn't a rate; it's a slow loss disguised as being busy.

From target income to a real rate

The honest way to price is to work backwards. Start with the annual income you actually want to take home. Add your business costs and the taxes you'll owe. That's your required gross revenue. Divide it by the number of hours you can realistically bill in a year — after subtracting holidays, admin time and the non-billable reality — and you have the minimum hourly rate that makes your target income possible. Almost everyone who runs this maths for the first time is startled by how high the number is. That startle is the point: it's the difference between pricing on hope and pricing on arithmetic.

Hourly, project and value pricing

An hourly rate is the foundation, but it's not the only way to charge, and it has a hidden ceiling: it punishes you for getting faster, since efficiency means fewer billable hours. Project pricing — quoting a fixed fee for a defined outcome — lets you capture the value of your speed and experience, and clients often prefer the certainty. Value pricing goes further, tying your fee to the result you deliver rather than the time you spend. Even when you quote projects, though, you should know your hourly rate underneath, because it's how you sanity-check whether a fixed quote is actually worth your time. The rate is the floor; how you package it is strategy.

Raising your rates without fear

Most freelancers set a rate once and then leave it far too long, watching their real income erode as their costs and skills both rise. Rates should climb as your experience, portfolio and demand grow — and the fear that raising them will scare off clients is usually overblown. New clients simply meet your new rate; existing ones can be moved up gradually with notice. The freelancers who thrive treat their rate as a living number they revisit regularly, not a one-time decision. If you're fully booked, that's not a sign to keep grinding at the old rate — it's the clearest signal in the market that your rate is too low.

A client's budget is not your rate

One trap deserves its own warning: letting a client's stated budget set your price. A budget tells you what one buyer hopes to pay, not what your work is worth or what your business needs to charge to survive. Anchoring to it — quoting low because a client mentioned a small number — is how freelancers end up subsidising other people's projects out of their own livelihood. Your rate is a property of your costs, skills and target income; a client who can't meet it is simply not your client, and that's fine. There are always more clients, but there's only one you, and undercutting your own sustainable rate to win work you resent is a losing trade even when it feels like winning.

You're not just a freelancer, you're a business — where doola does more

Setting the right rate is step one; the rate only holds up if the business behind it is run properly. As a freelancer you're a business entity, with tax obligations, bookkeeping, and often the choice of whether to formalise into a proper company for liability and tax reasons. That's where a service like doola does more: it handles business formation, tax and compliance and bookkeeping, so the income your rate generates is managed cleanly rather than becoming a year-end scramble. Use this calculator to set a rate that actually sustains you; use a formation and compliance service to run the business that rate is meant to fund.

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