How to use the freelance rate calculator
Enter the income you want to keep after tax, your yearly business costs and your effective tax rate on profit. Then set how many weeks a year you will not work, how many hours you work in a normal week, and what share of those hours you can actually bill. The calculator shows your minimum hourly rate, a day rate, and the revenue you need each month.
Why the salary maths undercharges
The usual starting point is to divide a salary by 2,080, the hours in a 40-hour week over 52 weeks. That number ignores four costs a salaried job hides: the tax an employer would withhold, the tools and insurance you now buy yourself, the weeks you take off unpaid, and the hours spent finding and running work that no client pays for. Each one pushes the rate you need upwards.
Billable hours are the number that matters
Your rate is spread only across the hours a client pays for. Proposals, calls with prospects, bookkeeping, invoicing and chasing payments all take time, and none of it is billable. If you work 40 hours but bill 24, every billed hour has to cover the other 16. Track your time for a month to find your real share before you rely on a guess.
A worked example
Say you want to take home 60,000 a year, spend 6,000 on software, equipment and insurance, and pay 25% tax on profit. You need 80,000 of profit, so 86,000 of revenue, and a 10% buffer lifts that to 94,600. Take 6 weeks off and bill 60% of a 40-hour week, and you have 1,104 billable hours. The minimum rate is about 86 an hour, or about 686 for an 8-hour day. The salary method gives 28.85, about a third of that.
Using the number
Treat the result as a floor, not a price. Check it against what clients in your field pay, and if the market rate is lower, the calculator shows which input to change: costs, time off, or the share of hours you bill. Quoting a day or project price instead of an hourly one also stops you being paid less for working faster.