ClearCalcWhy freelance rates are higher than salaries
A common mistake is to divide the salary you'd like by 2,080 (40 hours × 52 weeks). As a freelancer you also pay for things an employer would normally cover:
- Unbillable time. Finding clients, writing proposals, invoicing and admin can take 30–40% of your working week, so 25 billable hours out of 40 is realistic.
- Time off. Holidays, sick days and public holidays are unpaid. 46 working weeks a year is a common planning figure.
- Taxes and contributions that an employer would otherwise deduct or pay for you.
- Equipment and software: your laptop, internet, subscriptions and workspace.
The formula
Rate = ((Income ÷ (1 − Tax)) + Expenses) × (1 + Buffer) ÷ (Billable hours × Weeks)
The result is the minimum you need to charge. Your market rate may be higher depending on your skills, niche and the clients you serve, and it's worth checking what others in your field charge.
Charging by project instead of by hour
Many freelancers quote a fixed price per project. Estimate the hours a project will take, multiply by your hourly rate, then add 15–25% for revisions and surprises. As you get faster, project pricing lets you earn more per hour without raising your stated rate.
Frequently asked questions
What tax rate should I enter?
Use your best estimate of the combined income tax and social contributions on self-employed profit in your country. If you're not sure, a local accountant or your tax authority's website can give you the current rates.
I work with international clients. Which currency should I use?
Use the currency you want to earn in. If clients pay in USD or EUR but you spend in local currency, also allow for transfer fees and exchange rate swings when setting your buffer.
How many billable hours per week is realistic?
Most full-time freelancers bill 20–30 hours a week. Billing 40 hours every week is rare once you include sales and admin.