WinnieFreelance Hourly Rate Calculator
Work out the hourly and day rate you need from the income you want, your business costs and the hours you can really bill.
Income and costs
Gross, before income tax. What you would pay yourself as a salary.
Software, hardware, insurance, accountant, coworking, training.
10 to 20%. More if you are just starting out.
Your time
Hours you can invoice. 60 to 70% is realistic for solo freelancers.
Your minimum hourly rate
€70.84/ hour
Rounded rate
€75 / hour
Day rate (8 hours)
€600 / day
- Target income
- €60,000
- Business costs
- €12,000
- Buffer (10%)
- €7,200
- Revenue needed per year
- €79,200
- Per month
- €6,600
- Working weeks
- 43
- Billable hours per year
- 1,118 h
- Billable hours per week
- 26 h
All amounts are net. VAT or sales tax comes on top.
How the calculator works
The calculator uses the same formula experienced freelancers and accountants use:
Hourly rate = (target income + business costs + buffer) ÷ billable hours per year
It adds up what your business has to earn in a year, then divides it by the hours you can actually invoice. The second part is where most rate calculations go wrong, so the calculator spends most of its inputs on your time.
What to enter
- Target income per year. The gross income you want before income tax, as if you paid yourself a salary. Remember that health insurance and retirement savings are now yours to pay. If you are unsure, take your last salary and add 20%.
- Business costs per year. Software, hardware spread over its lifetime, insurance, your accountant, coworking, training and marketing. Most freelancers underestimate this; go through last year's bank statements once.
- Buffer. Slow months, late payments and cancelled projects happen. 10% is a minimum, 20% is sensible in your first year.
- Working hours, vacation, holidays and sick days. Every day off is a day without income, so the calculator turns them into working weeks. 30 vacation days, 10 public holidays and 5 sick days leave 43 weeks.
- Billable share. The part of your working time you can put on an invoice. Sales, proposals, bookkeeping and your own marketing are not billable. 60 to 70% is realistic for a solo freelancer, 75% is very good.
A worked example
The calculator opens with this example: a designer who wants €60,000 a year, has €12,000 in business costs and adds a 10% buffer needs €79,200 in revenue. With 43 working weeks of 40 hours and a 65% billable share, that is 1,118 billable hours.
€79,200 ÷ 1,118 hours = €70.84 per hour. Rounded up, that is €75 per hour or €600 per day.
The same designer dividing €60,000 by 2,080 hours, the hours of a full-time job, would have charged €29 per hour, less than half of what the business needs.
Why the salary method fails
As an employee you are paid for 2,080 hours a year, including vacation, sick days and every internal meeting. As a freelancer nobody pays you for those hours, and you also pay for your own equipment, insurance and the time it takes to find the next client. Your rate has to earn all of that in the hours you can bill, which is usually a little more than half of a full-time year.
Hourly rate, day rate or project price
Your hourly rate is the floor, not necessarily the way you sell your work:
- Hourly is fair when the scope is unclear.
- Day rate is your hourly rate times the hours of a working day, usually 8. It suits workshops and work inside a client's team.
- Project price is your estimated hours times your rate. Use the project estimate calculator to get the hours right, because a fixed price is only as good as the estimate behind it.
Check the result against the market
The calculator tells you what you need to charge. The market tells you what you can charge. Compare your number with rate surveys for your field, with what agencies charge for similar work and with what peers tell you. If your number is above the market, look at your costs, your billable share or a narrower niche. If it is below the market, charge the market rate.
For the full method with all the background, read how to calculate your freelance hourly rate. When it is time to charge more, this guide to raising your rates includes an email template.
Use your real numbers
The billable share is the input most people guess. After a month of tracking your time you know it, and your rate stops being a guess too. Winnie tracks time per client with a one-click timer and shows your hours per day and week.
Frequently asked questions
- How do I calculate my freelance hourly rate?
- Add your target income, your yearly business costs and a buffer of 10 to 20 percent, then divide by the hours you can bill in a year. Billable hours are your working weeks times your weekly hours times your billable share, which is 60 to 70 percent for most solo freelancers.
- Why is my freelance rate so much higher than my old hourly wage?
- As an employee, your employer paid for vacation, sick days, equipment, insurance and all the hours nobody billed. As a freelancer your rate has to cover all of that from fewer billable hours, which is why it usually lands at 1.5 to 2.5 times the salary divided by 2,080 hours.
- How many billable hours does a freelancer have per year?
- With 30 vacation days, 10 public holidays and 5 sick days you have about 43 working weeks. At 40 hours a week and a 65 percent billable share that is roughly 1,100 billable hours, a little over half of a full-time year.
- How do I turn my hourly rate into a day rate?
- Multiply the hourly rate by the hours in your working day, usually 8. A rate of €75 per hour becomes a day rate of €600.
- Should the rate include VAT or sales tax?
- No. The calculator works with net amounts. If you have to charge VAT or sales tax, it comes on top of the rate on your invoice.
Embed this calculator
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