Blog · 6 November 2026
How much should I charge as a freelancer?
Ask ten freelancers how they set their rate and you will get ten answers: copy a competitor, add a bit to the old salary, pick a round number that sounds confident. None of those answers is grounded in what you actually need to earn. The question has a correct starting point, and it is arithmetic, not guesswork: work backwards from the income you want to keep, add the costs an employer used to hide, gross the total up for tax, and divide by the hours you can actually bill. That number is your floor — the least you can charge and still hit your target. Anything below it is a pay cut you gave yourself.
Why salary ÷ 2,080 is the wrong starting point
The most common shortcut — take the salary you want and divide by 2,080 working hours — fails three times over. First, it ignores the costs that used to sit on your employer's side of the ledger: software, equipment, insurance, retirement contributions and the paid time off you no longer get. Second, it ignores tax: as a freelancer you pay it out of your own fees, with nobody withholding it for you. Third, and most damaging, it assumes every working hour is billable. In practice a solo freelancer bills roughly 50–70% of working hours; the rest goes on finding work, proposals, admin, invoicing and learning. The method on this site's About page corrects all three, and the freelance rate calculator runs it for you:
Billable hours = (52 − vacation weeks) × hours per week × billable share
Real rate = Revenue needed / Billable hours · Day rate = Real rate × 8
Worked example: the $80,000 target
Take the site's planning defaults — a target salary of $80,000, $5,000 of business expenses, $7,000 of benefits you now buy yourself, a 22% planning tax rate, 4 weeks off, a 40-hour week and a 60% billable share (all defaults, all editable):
Revenue needed = ($80,000 + $5,000 + $7,000) / (1 − 0.22) = $92,000 / 0.78 = $117,948.72 a year
Billable hours = (52 − 4) × 40 × 0.60 = 1,152 hours a year
Real rate = $117,948.72 / 1,152 = $102.39 an hour — a day rate of about $819 (8 hours)
The naive rate would have been $80,000 / 2,080 = $38.46 an hour. The real floor is about 2.7 times that, because the naive figure skips $37,949 of costs and tax and pretends you bill 928 hours you never will.
Same formula, three professions
The formula does not care what you do — only what you need to earn and what it costs you to work. The table below runs it for three common freelance professions, keeping the same 1,152 billable hours and 22% planning tax rate, and changing only the target and the costs. These are worked examples with stated assumptions, not market rates: what clients in your niche will actually pay is a separate question.
| Example | Target + costs | Revenue needed | Hourly rate | Day rate |
|---|---|---|---|---|
| Designer — $60,000 target | $60,000 + $4,000 + $5,000 | $88,461.54 | $76.79 | ~$614 |
| Developer — $100,000 target | $100,000 + $6,000 + $8,000 | $146,153.85 | $126.87 | ~$1,015 |
| Writer — $50,000 target | $50,000 + $3,000 + $4,000 | $73,076.92 | $63.43 | ~$507 |
Notice the pattern: the rate is driven far more by your target and your billable share than by your job title. A developer who bills only 50% of their hours needs a higher rate than one who bills 70%, at the same salary target — which is why guessing from a job title alone is a poor way to price.
Find your real billable share before you trust the number
The 60% default is a planning assumption, not a statistic — no official body publishes a standard figure. Track your time honestly for a month: hours invoiced against hours worked. If you bill 45% rather than 60%, your floor rises by a third, and charging the 60% number would leave you short. The same applies to tax: 22% is a labeled planning default, and your real combined rate depends on where you live and how you are set up. And remember the tax bill does not arrive once a year — as the quarterly-tax guide shows, it lands in four instalments, so reserve the tax share of every invoice the day it is paid. Admin time counts too: the hours quarterly reporting eats are real working hours, and pricing the admin quarter explains how to stop them silently eating your billable week.
Your floor is not your price
The number this method gives you is a floor for sustainable pricing, not a market rate. What a client will pay also depends on skill, demand, niche and the value of the work to them — and for fixed-price or day-rate work, quoting the project rather than the hour usually serves you better. But a floor is what stops the two classic mistakes: quoting a salary-divided-by-2,080 rate and discovering months later that you cannot afford the tax bill, or copying a competitor's rate without knowing whether it covers your own costs. Run your own numbers through the freelance rate calculator with your real target, your real expenses and your real billable share. Then charge at least that — and let the market, not the arithmetic, decide how much above it you can go.
Estimate only — not financial advice. Rates are planning estimates from the stated assumptions; tax and benefits depend on your country, filing status and setup.