Freelance Hourly Rate Calculator

How to use this calculator

1. Choose your currency. It changes formatting only, not the maths.
2. Enter the take-home pay you want each year, after tax and business costs.
3. Add your yearly business costs: software, equipment, insurance, accounting and anything else the business pays for.
4. Enter your weeks off (holiday, public or bank holidays and sick days) and the hours you work in a normal week.
5. Set the share of those hours you can bill to clients. If unsure, start with 60%.
6. Set the share of your profit you will put aside for tax. The minimum hourly rate, the day rate and the working appear straight away.

It works for any freelancer, sole trader, self-employed consultant or independent (1099) contractor, in any country: the maths is the same everywhere and only the tax share changes. The result is a floor and a planning estimate, not a market rate or tax advice.

What do I need to enter?

• Take-home pay you want — per year, after tax and business costs. It must be above zero to calculate a rate.
• Business costs — optional yearly costs the business pays for, which come off before tax.
• Weeks off per year — holiday, public holidays and sick days, from 0 to 51 weeks in half-week steps.
• Hours you work per week — all working hours, billable or not, up to 100. It must be above zero.
• Share of those hours you bill — the percentage you can charge clients for, above 0% and up to 100%. A lower share raises the rate.
• Tax to set aside — a percentage of profit (income after costs), from 0% to 75%.

What do the results show?

• Minimum hourly rate — the lowest rate per billable hour that still pays your take-home.
• Day rate (8-hour day) — the hourly rate multiplied by 8.
• Revenue to bill each year — the profit needed for your take-home after tax, plus business costs.
• Billable hours each year — weeks worked × hours per week × billable share.
• Revenue per hour worked — the same revenue spread over every hour you work, billable or not.
• Summary — where the money you bill goes, your billable year, the rate at other billable shares (50% to 80%) and a comparison with a salary-style rate.

How is a freelance hourly rate calculated?

Work out the revenue you must bill, then divide it by the hours you can bill. Tax is taken from profit, which is what is left after business costs, so costs come off before tax and never after it.

Take the calculator's defaults: £50,000 take-home, £5,000 of business costs, 6 weeks off, a 40-hour week, 60% billable and 25% set aside for tax. That is 46 weeks and 1,840 hours worked, of which 1,104 are billable. The profit needed is £50,000 ÷ 0.75 = £66,666.67, so with costs added the revenue to bill is £71,666.67. Divided by 1,104 billable hours, the minimum rate is £64.92 an hour, or £519 for an 8-hour day.

Why can't I just divide my salary by 2,080 hours?

With the defaults, £50,000 ÷ 2,080 hours is £24.04 an hour. The minimum freelance rate is £64.92 an hour, about 2.7 times higher, because the same take-home has to come from 1,104 billable hours instead of 2,080, and tax and business costs are paid out of what is billed.

An employer pays for several things a freelancer has to cover alone:

• Paid holiday, public holidays and sick pay.
• Pension contributions and health cover.
• Equipment, software and a place to work.
• Tax and National Insurance or payroll tax, which a freelancer pays from billed income.
• Time spent finding clients, writing proposals and invoicing, none of which is billable.

Across the year the defaults earn £38.95 of revenue for every hour worked, billable or not. That is the number to compare with a salary, not the hourly rate itself.

What share of my time should be billable?

Most freelancer guides plan for about 50–70% of working hours being billable. The rest goes on admin, finding clients, invoicing and learning. Overestimating the share is a common way to set a rate too low. The table runs the default inputs at four different shares.

How much tax should a freelancer set aside?

There is no single figure: tax depends on your profit, where you live and any other income. A common planning range is 25–30% of profit. The two examples below show how that figure is made up in the UK and the US, so you can set your own in the tax field.

How is a UK sole trader taxed?

A sole trader pays Income Tax and Class 4 National Insurance on profit. For 2026–27 in England, Wales and Northern Ireland, GOV.UK gives a £12,570 Personal Allowance, then 20% up to £50,270, 40% up to £125,140 and 45% above. Scotland sets its own bands. Under the self-employed National Insurance rates, Class 4 is 6% on profits between £12,570 and £50,270 and 2% above. Class 2 no longer has to be paid; it is voluntary below the £7,105 small profits threshold.

To keep £50,000 you need about £66,704.48 of profit. The working below uses those rates and assumes no other income, no pension and no student loan.

That is £16,704.48 in tax and National Insurance on £66,704.48, or 25.0% of profit, which is why the calculator starts at 25%. A £1,000 trading allowance can be claimed instead of expenses, but not as well as them. You must also register for VAT once taxable turnover goes over £90,000; VAT is added on top of your rate, not included in it.

How is US self-employment tax calculated?

The IRS charges self-employment tax at 15.3%: 12.4% for Social Security and 2.9% for Medicare. It applies to 92.35% of net earnings, as IRS Topic 554 explains, and you can deduct half of it when working out your adjusted gross income. The Social Security part stops at an annual earnings cap, which the Social Security Administration publishes each year.

Federal income tax, which depends on your filing status and deductions, and any state tax come on top, so a US freelancer's total share is usually higher than the 14.13% above. If you expect to owe $1,000 or more, the IRS expects estimated tax payments during the year rather than one bill at the end, which is another reason to set money aside as you bill.

How many weeks off should a freelancer plan for?

Employees are paid for time off; freelancers are not. In the UK, GOV.UK sets the statutory minimum at 5.6 weeks of paid holiday a year, and an employer can count bank holidays towards it. Self-employed people are not eligible for Statutory Sick Pay. In the US, the Department of Labor says federal law does not require payment for time not worked, such as vacations, sick leave or holidays.

The calculator starts at 6 weeks off, close to the UK allowance. Count holiday, public or bank holidays and sick days together, then add any quiet weeks between jobs you expect.

What counts as a business cost?

Add up a year of everything the business pays for:

• Software and subscriptions.
• Equipment, and replacing it.
• Insurance, such as professional indemnity or liability cover.
• Accounting and bookkeeping.
• Training, books and professional memberships.
• Marketing, a website and a co-working space or home-office costs.
• Travel for client work.

Costs that reduce your taxable profit belong in this field. Personal spending belongs in your take-home. If you want to replace an employer's pension or health cover, put what you will pay in costs when it reduces your taxable profit where you live, and in take-home when it does not.

Hourly rate, day rate or project price?

The day rate here is the hourly rate × 8 hours, so a result of £64.92 an hour is £519 a day. If you bill 7.5-hour days, multiply the hourly rate by 7.5 instead. Some clients quote day rates and others hourly rates, but the minimum is the same.

For a fixed project price, estimate the hours the work will take, multiply by your rate and add a margin for the unexpected. To check the price against a margin target, use the Markup Calculator or the Profit Margin Calculator.

What does this calculator not include?

It applies the tax share you enter and nothing more. It does not apply tax bands or allowances, add VAT or sales tax, model a limited company or IR35, or account for a student loan, other income or Scottish rates. Payments that arrive late and quiet months are not modelled either. Treat the result as a planning figure and check your own tax position with an accountant or the tax authority for your country.

What if I am comparing freelancing with a job?

Enter your current take-home as the target to see the freelance rate that matches it. To turn a salary into an hourly figure, use the Hourly to Salary Calculator. To see what an employed salary leaves after tax, use the UK Take-Home Pay Calculator. Freelance income also arrives unevenly, so the Emergency Fund Calculator shows how much cover to build.

Sources for the tax and leave figures

• GOV.UK: Income Tax rates and Personal Allowances. The 2026–27 bands and Personal Allowance.
• GOV.UK: Self-employed National Insurance rates. Class 4 rates and thresholds, and voluntary Class 2.
• GOV.UK: VAT registration thresholds. The £90,000 registration threshold.
• GOV.UK: Tax-free allowances on property and trading income. The £1,000 trading allowance.
• GOV.UK: Holiday entitlement. 5.6 weeks of statutory paid holiday for workers.
• GOV.UK: Statutory Sick Pay and employment types. Self-employed people are not eligible.
• IRS: Self-employment tax (Social Security and Medicare). The 15.3% rate and the deduction for half of it.
• IRS: Topic no. 554, Self-employment tax. The 92.35% adjustment.
• IRS: Estimated taxes. The $1,000 rule for quarterly payments.
• US Department of Labor: Vacation leave. Federal law does not require pay for time not worked.

This is general information, not tax or financial advice. Rates and thresholds change, so check the linked pages for the current position.

Frequently asked questions