Last updated 3 September 2026
Why "billable" hours, not total hours
A salaried job's hourly rate only has to cover the work itself. Freelancing has to cover admin, invoicing, finding clients, and business costs too — all from the hours actually billed. This calculator divides the income you want plus your expenses by only your billable hours, which is why the number comes out higher than a naive salary-to-hourly conversion would suggest.
Why a freelance rate is not a salary divided by hours
This is the mistake that keeps new freelancers underpaid for years. A $60,000 salary works out at roughly $29 an hour across 2,080 working hours, so charging $35 feels like a raise. It is not, because an employer was paying for a great deal that never appeared on the payslip.
Three things have to be rebuilt into the rate. First, unpaid time: holiday, sick days, admin, invoicing, and — the big one — the hours spent finding work. Most independent freelancers bill somewhere between 60% and 70% of their working hours, so 2,080 hours becomes roughly 1,300 billable ones. Second, costs an employer used to absorb: software, hardware, insurance, pension contributions, accountancy. Third, self-employment tax, which in many countries means paying both halves of a contribution an employer previously split with you.
A worked example
Target take-home of $60,000. Add $8,000 of business costs and allow 30% for tax and contributions, which means revenue needs to be around $97,000. Divide by 1,300 billable hours and the rate is about $75 an hour — roughly two and a half times the naive salary conversion, and that is before any profit margin.
Once you have that number, quoting by project rather than by hour is usually better for both sides. It gives the client a fixed figure they can approve, and it stops rewarding you for working slowly. Use the hourly rate as your internal floor for estimating, not as the number on the invoice.
Common questions
Why is my billable rate so much higher than a salaried equivalent?
Because not every hour is billable. Admin, marketing, invoicing and finding clients all take time that isn't directly paid for, and business expenses come out of the same pot — a salaried hourly rate doesn't have to absorb either of those.
What counts as billable hours per week?
Only the hours you can actually invoice a client for, not total hours worked. Most freelancers find their genuinely billable time is well under their total working hours once admin and business development are accounted for.
Why 48 weeks instead of 52?
Unlike a salaried role, time off for a freelancer is genuinely unpaid, so a more realistic default subtracts a few weeks for holidays and downtime. Adjust it to match your actual working year.
Why can I not just divide a salary by 2,080 hours?
Because that ignores everything an employer used to cover. Unbilled hours, holiday, software, insurance, pension and the employer's half of tax all have to be rebuilt into the rate. The realistic figure is often two to three times a straight salary conversion.
How many hours can I realistically bill?
Most independent freelancers bill 60% to 70% of their working hours. The rest goes on finding work, quoting, invoicing, admin and unpaid revisions. Planning against 1,200 to 1,400 billable hours a year is more realistic than 2,080.
Should I quote hourly or per project?
Per project is usually better once you can estimate reliably. It gives the client a fixed number to approve and stops penalising you for working efficiently. Keep the hourly rate as the internal figure you build estimates from.