Freelance hourly rate calculator
A full-time freelancer with 40 hours a week does not bill 40 hours. Sales calls, quoting, invoicing, chasing payment, bookkeeping, admin and marketing eat a large share, and 60% billable is a healthy figure rather than a pessimistic one. Anyone pricing on the assumption of 100% billable hours is setting a rate roughly 40% too low and will discover it about six months in.
Tax rates and social contributions vary enormously by country and structure. Use your own effective rate, and talk to an accountant before setting a rate you will live on.
A freelance rate has to cover take-home pay, business expenses and tax, spread over billable hours only. Wanting 55,000 take-home with 7,000 of expenses at 32% tax and 60% billable across 46 weeks needs about 82 an hour, or a 653 day rate.
How to set a freelance rate
The three deductions compound, which is why freelance rates look so much higher than the equivalent salary and are not. Only 60% of hours are billable, only 46 weeks are worked, and roughly a third of revenue goes to tax before anything reaches you. Taken together, an hourly rate needs to be around two and a half times the naive salary-to-hourly conversion to produce the same income. A rate set by looking at what others charge, without doing this arithmetic, is how experienced freelancers end up earning less than they did employed.
Questions
Take-home plus expenses, grossed up for tax, divided by billable hours a year.