Invoicing and finance · Free
Hourly rate calculator
If you divide the salary you want by 40 hours a week, you'll get a rate that's too low, because hardly anyone bills 40 hours. Here you work it out with real hours.
Guide
The formula for your rate
Hourly rate = (target income + business expenses) × (1 + safety margin) ÷ billable hours per year.
The safety margin covers slow months, late payers and hours you spend on a project but cannot bill. 10–15% is reasonable.
Example: freelance consultant
They want to earn €40,000 gross a year. Expenses (social security, accountant, software, equipment) come to €9,000. They work 46 weeks and bill 25 hours a week: 1,150 hours a year.
(40,000 + 9,000) × 1.10 ÷ 1,150 = €46.87 an hour, about €375 for an 8-hour day. Charging €30/h based on a 40-hour week would leave them far short of their target.
Hourly or project pricing
Your hourly rate is your floor, not necessarily what goes on the quote. For many services it is better to quote per project: estimate the hours, multiply by your rate and add a margin for risk.
How it works
- Enter what you want to earn per year and your business expenses.
- Enter weeks off and billable hours per week.
- Add a safety margin and see your hourly and day rate.
Frequently asked questions
How do I calculate my hourly rate?
(Target income + yearly expenses) × (1 + safety margin) ÷ billable hours per year. Billable hours are the weeks you work times the hours you actually charge clients each week.
How many billable hours does a freelancer have?
Far fewer than they work. Between admin, sales, proposals and training, billing 20–30 out of every 40 hours is typical.
Which expenses should I include?
Self-employed social security, accountant, software, equipment, insurance, workspace, training and travel. Leave out VAT, which you collect and pay on behalf of the tax office.
Is target income gross or net?
Gross, before income tax. If you want a specific take-home figure, add what you expect to pay in tax.
Do you do this every day?
If you merge documents, prepare invoices or copy data between programs every day, that can be automated, and it's what we do.