How to set your freelance rate, step by step

Most freelancers guess a rate by looking at what others charge. A better start is arithmetic: what you need to earn, divided by the hours you can really bill.

Step 1: decide the take-home income you want

Write the amount you want in your bank account after tax, for the whole year. Include what you need to live on and what you want to save for a bad month. If you now earn a salary, use it as a starting point, then add the things an employer used to pay: health cover, a retirement contribution and paid leave. This number is the goal in the calculator.

Step 2: list your yearly business costs

Add equipment, software, internet, a co-working desk if you use one, accounting help, insurance, courses and the share of travel that belongs to work. Write a yearly figure for each, even for items you pay monthly. A checklist of costs freelancers forget is on this site.

Step 3: add tax and savings

Your profit is taxed, and you may want to put a share of it away for retirement or slow months. Enter both as a percentage of profit. The calculator works backwards: if you want 600,000 after a total of 25 percent for tax and savings, you must earn 800,000 of profit first. Use the country pages to find where tax guidance for your country starts.

Step 4: count the weeks you will not work

Public holidays, festivals, your own leave, sick days and a spare week for illness in the family all reduce the weeks you can earn. Many first-year freelancers use 4 weeks, then find they needed 8. If you are unsure, use a higher number: being too careful costs you nothing, while being too hopeful costs you money.

Step 5: be honest about billable hours

Of a 40-hour week, most freelancers bill far less. Finding clients, writing quotes, answering messages, doing accounts and learning tools are real work that nobody pays for. A share of 50 to 60 percent is common for people who sell their own work; teachers and assistants who are booked by the hour can be higher. Track your hours for two weeks with a simple timer and use that figure, not a hope. The billable hours guide shows how.

Step 6: divide, then compare

The yearly income you need (profit plus costs) divided by your billable hours is the lowest hourly rate that meets your goal. Convert it to a day rate or a monthly retainer with the conversion table. Now compare it with what clients in your field pay. If the market pays less than your floor, you have three choices: cut costs, raise the billable share, or move to work that pays more per hour.

What the rate is not

The result is a floor, not a price. Clients pay for results, so a project that saves them a lot can be priced above your floor, and a repeat client who sends steady work can get a small discount. Never go below your floor without knowing why. The pricing models page compares hourly, fixed, retainer and value-based pricing.

Common questions

What if my calculated rate is higher than what clients in my area pay?

Check each input first: costs may be too high, or billable hours too low. If the numbers are honest, look for clients outside your area, move to higher-value work or improve your billable share. Do not simply accept a rate that leaves you short of your goal.

Should I tell clients how I calculated my rate?

No. Clients care about the price and the result, not your costs. The calculation is for you.

How often should I revisit my rate?

At least once a year, and every time your costs, your goal or your billable share changes noticeably.

Keep going

Example figures on this site are made up to show the working. They are not market rates or averages. Tax, social-insurance, sales-tax and holiday rules differ by country and change, so this site does not state them: ask the tax authority of your country or an accountant. Checked 14 November 2026.