The True Hourly Rate Calculator
Most freelancers undercharge because they base their rate on a 40-hour work week and forget about taxes and business expenses. Find out what you actually need to charge.
How much do you want to take home after taxes and expenses?
Software, hosting, marketing, office supplies, etc.
Income tax, self-employment tax, etc.
Vacation, sick days, holidays.
Time spent actually doing client work (usually 20-30 hours).
Your Freelance Math
This is the absolute minimum you need to charge per hour to hit your take-home goal, cover your expenses, and pay your taxes.
Why do freelancers undercharge?
If you want to make $75,000 a year, you might think you simply divide $75,000 by 2,080 hours (40 hours a week for 52 weeks). That gives you an hourly rate of about $36/hr. This is a massive mistake.
As a freelancer, you don't get paid for time spent on administrative tasks, marketing, pitching clients, or taking time off. On average, most full-time freelancers only bill between 20 and 25 hours per week.
The hidden costs of freelancing
You also have to pay your own taxes (including self-employment tax in the US) and cover your own expenses. If you use software like Adobe CC, pay for web hosting, buy your own laptop, and pay for marketing, those costs eat directly into your take-home pay. The calculator above factors all of this in to give you the true rate you need to charge to reach your financial goals.
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