Remote work · Freelancers
Work backwards from the income you actually want. Set your target take-home, billable hours, expenses, tax, and profit margin. We compute the hourly, daily, weekly, and monthly rate that makes the math work.
Most freelancers set their hourly rate by looking at what other people in the same role charge and rounding to the nearest fifty dollars. This works until tax season, when it stops working. The cleaner approach is to start from the take-home income you actually want and reverse the calculation through tax and expenses.
We compute the required gross revenue as your target take-home divided by (1 - tax% - expenses%), then divide that by your billable hours per year (hours per week multiplied by working weeks). That gives the bare cost basis, the minimum rate at which you would break even on the year. We then add your profit margin on top, which is the slack you keep for slow months, equipment, savings, and price pressure on tough negotiations.
Billable hours per week is the most under-set number. Forty hours is impossible. Twenty-five is realistic for someone with steady work. Fifteen to twenty is reasonable for someone splitting time between client work and business development. The lower this number, the higher the rate has to climb. Weeks per year defaults to 48, four weeks for holidays, sick days, and slow patches combined.
Say your target take-home is $70,000, you estimate a 25% effective tax rate and 10% business expenses, you can bill 25 hours a week, you work 48 weeks a year, and you want a 20% margin. The gross revenue you need is $70,000 divided by 0.65, about $107,700. Across 1,200 billable hours that is a cost basis just under $90 an hour, and with the margin applied the rate to quote is about $108 an hour.
Notice how far that sits from the naive math. $70,000 divided by a "full-time" 2,000 hours suggests $35 an hour, and a freelancer who quotes $35 expecting to keep it will discover at year end that tax, expenses, and unbillable time ate most of it. The reverse calculation exists precisely to surface that gap before you commit to a number in a client call.
The industry medians shown below the rate are 2025 estimates from cross-referenced sources. They are not authoritative, top operators bill multiples of these. Use them as a sanity check. If your calculated rate sits below the median for your discipline, you are likely underselling the cost of doing business at all. If it sits well above, you should be able to justify it to clients, depth of specialism, prior outcomes, speed.
This is a rate calculator, not financial or tax advice. Real tax rates vary by jurisdiction, deductible structures, and entity type, talk to a qualified accountant for actual numbers. Pair this with the meeting cost calculator when pricing fixed-fee projects, and the working days calculator when estimating how many billable days a project window really contains.
Billable hours are only the hours a client pays for. Proposals, invoicing, bookkeeping, marketing, calls that do not convert, learning, and email are all working time that nobody pays for directly. Once those are subtracted, the billable share of a working week is far smaller than it feels, which is why a rate computed against 40 billable hours comes out dangerously low.
Everything the business spends to exist: software subscriptions, equipment and its replacement cycle, insurance, accounting, co-working or home-office costs, and payment-processing fees. The right percentage is whatever your own books say it is; if you have not measured it yet, err on the high side until you have a year of records. If you invoice internationally, currency-conversion and transfer fees belong here too.
Your target take-home is your salary, the amount you plan to live on. The margin is the buffer the business keeps above it: cover for slow months, a client who pays late or not at all, time off beyond plan, and rate pressure in a negotiation. Pricing with zero margin means one bad month comes straight out of your salary.
The tax field is a flat percentage you set yourself, so it works anywhere, but real tax is rarely flat. Effective rates differ by country, by entity type, and by deductions, a sole trader in one country and a limited company in another can pay very different effective rates on the same revenue. Use your accountant's estimate of your effective rate, not the headline bracket.
The classic signals: you are booked solid for weeks ahead, prospects accept your quote without negotiating, or the work you deliver now produces measurably more value than when you set the rate. Raising rates on new clients first, while keeping existing clients at the old rate for a defined period, is the lowest-friction path.