What is Hourly Rate?
The amount a freelancer charges per hour of work, calculated to cover expenses, taxes, and desired income.
What Is a Freelance Hourly Rate?
A freelance hourly rate is the amount you charge clients for each hour of billable work. Unlike an employee salary, your hourly rate must cover not just your income but also taxes, business expenses, unpaid vacation time, and a profit buffer.
How to Calculate Your Hourly Rate
The basic formula:
**Hourly Rate = (Annual Income Goal + Expenses) ÷ Annual Billable Hours**
For example, if you want $70,000 take-home, have $10,000 in expenses, and can bill 1,200 hours per year, your minimum rate is $80,000 ÷ 1,200 = $67/hour.
Common Mistakes
When to Raise Your Rate
Review your rate at least annually. Raise it when: your skills have improved significantly, your demand exceeds your capacity, or your cost of living has increased.
Related Calculators
Hourly Rate Calculator
Calculate your optimal freelance hourly rate based on your income goal, billable hours, overhead costs, and desired profit margin.
Day Rate Calculator
Convert your freelance hourly rate to a day rate, or calculate the optimal day rate for consulting and contracting engagements.
Billable Hours Calculator
Calculate how many billable hours per week you need to hit your income target after accounting for vacation, sick days, and admin time.
Related Terms
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