How to calculate your freelance hourly rate
The formula behind this calculator: add your desired annual income to your annual business expenses, divide by your realistic annual billable hours, then increase that base rate to account for the time each year that isn't billable — proposals, admin, marketing, and time off. Most freelancers should plan for 25–35% non-billable time.
The formula
Base rate = (Desired income + Annual expenses) ÷ (Billable hours per week × Working weeks per year)
Recommended rate = Base rate ÷ (1 − non-billable buffer)
Why your rate needs a non-billable buffer
A full-time freelancer rarely bills 40 hours a week, every week. Client work competes with proposals, invoicing, marketing, admin, learning, and unpaid gaps between projects. If you price only against the hours you expect to bill, a slow month or a client who churns leaves you short of your income goal for the year. Building in a 15–35% buffer means your rate still supports your target income even when a chunk of your time each week doesn't get billed to anyone.
Typical non-billable buffers by freelancer type
| Situation | Suggested buffer |
|---|---|
| Steady retainer clients, light admin | 15% |
| Mixed project work, normal admin/marketing load | 25% |
| New freelancer, heavy prospecting and business development | 35% |
What counts as a business expense here?
- Software subscriptions (invoicing, design, hosting, project tools)
- Insurance (liability, health premiums you cover yourself)
- Equipment and its depreciation (laptop, camera, tools)
- Contractor or assistant costs
- Portion of self-employment tax not otherwise budgeted for
Frequently asked questions
Is this the same as my take-home pay? No — this is your hourly billing rate before taxes. It's built to cover your target income plus expenses, not your after-tax take-home.
Should I round the number? Most freelancers round up to a clean number ($65, $75, $90) rather than billing an oddly precise figure like $71.42 — treat this calculator's output as a floor, not a sticker price.
What if my clients won't pay this rate? That's a signal to either reduce non-billable overhead, raise your billable-hours capacity, or reposition toward clients who value the work at this level — undercutting your calculated rate usually just working more hours for the same income.
From rate to invoice
Once you know your rate, the next step is turning tracked hours into invoices without redoing arithmetic every time. Milevo lets you set your rate once, track billable time against a project, and generate a professional PDF invoice from those hours in a tap — or use the free invoice generator to bill a one-off project manually.