Business

Hourly Rate Calculator

Enter your income goal, expenses, work schedule, and billable share to find the hourly rate that funds them — with a profit buffer on top. Freelancers bill a fraction of their hours; this math stops that fraction from quietly bankrupting you.

Last updated: September 30, 2026

Your result · Required hourly rate

$84.85

Goal + expenses + buffer, over billable hours.

Annual revenue needed: $97,750.00
Billable hours / year: 1,152

Free · No signup · Math stays in your browser

What your result means

Required hourly rate is the headline: the number that funds your goal, costs, and buffer across the hours you can actually invoice.

Annual revenue needed shows the same target as a yearly figure; billable hours reveal why the rate shocks people — only a fraction of work is sellable.

How the calculation works

Add income goal and expenses, then grow the sum by the profit buffer.
Multiply weeks by weekly hours by billable share for yearly billable hours.
Divide revenue need by billable hours for the rate.

Formula

rate = (goal + expenses) × (1 + buffer) ÷ (weeks × hours × billable share)

Revenue need(income goal + expenses) × (1 + buffer %)
Billable hoursweeks × hours/week × billable %
Raterevenue need ÷ billable hours

Worked examples

Example: $80k goal, $5k costs, 15% buffer, 48×40 at 60%
annualGoal: 80000annualExpenses: 5000profitPct: 15weeksPerYear: 48hoursPerWeek: 40billablePct: 60
Result: Required hourly rate $84.85 · Billable hours / year 1,152 · Annual revenue needed $97,750.00
Example: lean solo, $50k, no buffer, 50 weeks at 70%
annualGoal: 50000annualExpenses: 2000profitPct: 0weeksPerYear: 50hoursPerWeek: 35billablePct: 70
Result: Required hourly rate $42.45 · Billable hours / year 1,225 · Annual revenue needed $52,000.00

Assumptions

What this calculation takes for granted — check these before relying on the result.

Assumptions:

Default values are an example $80k goal — replace with your figures.
Work is evenly spread; feast-or-famine seasonality is not modelled.
Expenses are steady annual totals in today’s money.

Limitations

Why your real figure may differ:

Markets cap rates no matter what the math says — validate against what clients pay.
Unpaid admin, sales, and learning time are inside the non-billable share; underestimate it and the rate lies.
Taxes on the income goal itself are not modelled — gross the goal up first.

Frequently asked questions

Why is the rate so much higher than salary ÷ 2000?

Salaries hide benefits, downtime, and non-billable work. At 60% billable with costs and buffer, $80k needs ~$85/hr — not $40. The gap is the business, not greed.

What billable share should I assume?

50–70% for most freelancers once sales, admin, and learning are counted honestly. New independents should start at 50% — optimism here is the classic failure mode.

Should profit buffer really be in my rate?

Yes — it funds slow months, equipment, and growth instead of your savings. 10–20% is standard; 0% means one bad quarter eats the plan.

Hourly, daily, or project pricing?

Use this rate as your floor to sanity-check any quote: estimated hours × rate must clear the project price, or the project subsidizes the client.

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