The rate that actually pays your salary
New freelancers often pick an hourly rate by glancing at what a job would pay and dividing by 2,000 hours — and then wonder why they never hit their income goal. The catch is that you can't bill every hour you work: proposals, invoicing, admin, marketing and downtime all eat into the day. This tool works backwards from the income you want and only the hours you can truly bill, so the rate reflects reality.
Billable hours are the key number
If you work an 8-hour day but only 5 of those are billable client work, your real capacity is 5 hours, not 8 — a huge difference to your rate. The same goes for days: subtract holidays, vacation, sick days and slow periods to get realistic working days per year. Being honest here is what separates a rate that sustains you from one that quietly loses money.
Don't forget costs and taxes
Software, hardware, insurance, a coworking desk and self-employment taxes are yours to cover, not a client's. Add your annual business costs so the rate includes them, and remember the result is pre-tax revenue — set aside a portion for taxes on top. Recalculate whenever your target income, availability or costs change, and use it as a floor: charging for the value you deliver can take you well above it.
Estimate: a starting floor, not tax or financial advice.
Frequently asked questions
What counts as a billable hour?
Only time a client actually pays for. Admin, proposals, marketing, learning and breaks are real work but usually not billable, so exclude them.
Is the result before or after tax?
Before tax. It's the revenue you need to bill; set aside a share for income and self-employment taxes on top of it.