Freelance rate calculator: hourly, project and retainer modes
Most rate calculators ask for a number you do not have yet. This one works backwards from a number you do know: the net income you want to take home. Fill in your target, your expenses, a tax allowance and — the part everyone skips — an honest count of the hours you cannot bill. The calculator does the rest in your browser, in any currency you think in.
Key takeaways
- Hourly mode turns target income into an hourly and day rate by subtracting holidays, sick days and admin/sales hours before dividing, then grossing up for tax and profit.
- Project mode converts an hours estimate into a safe fixed price: base fee × risk buffer + a separate contingency line.
- Retainer mode prices a monthly hours block and forces you to pick an unused-hours policy — the #1 retainer dispute.
- Every assumption is shown and explained below; nothing is hidden in a "market rate".
- Educational tool only — not financial or tax advice; tax rules depend on your jurisdiction.
Start calculating
Pick a mode, fill the fields, press Calculate. Defaults are conservative starting points, not recommendations — change them to match your reality. Nothing is uploaded; the math runs locally.
Methodology: how the hourly model works
The hourly mode is the "honest salary formula" — the same derivation we unpack in the salary×2 → ÷ billable formula explained. In words:
- Subtract non-working time. Holidays and sick days come off the 52-week year first: working weeks = 52 − holiday weeks − sick days ÷ work days per week.
- Build capacity. Capacity hours = working weeks × work days × hours per day.
- Subtract non-billable work. Admin, sales and marketing are real weekly hours: billable hours = capacity − working weeks × non-billable hours/week. If nothing is left, the model refuses — you cannot sell 100% non-billable time.
- Gross up for tax. Revenue = (target net + expenses) ÷ (1 − tax %). Dividing (not multiplying) makes the tax figure an average share of revenue.
- Add profit. Revenue × (1 + profit %) funds slow months and gear.
- Divide. Hourly rate = revenue with profit ÷ billable hours; day rate = hourly × hours per day. A round-up to the nearest 5 is offered for tidy quotes.
Project mode is hours × rate, multiplied by a risk buffer, plus a separate contingency line — the structure we defend in quoting fixed-price projects safely. Retainer mode is monthly hours × rate with an optional commitment discount, plus a policy note, because unused hours cause more retainer arguments than price does (see retainers explained).
The assumption table — every knob, and why it exists
| Knob | Default | Reasoning |
|---|---|---|
| Target net income | 60,000 | Your take-home goal. Not a benchmark — set it from your own budget. Freelance-industry guides, e.g. the Freelancers Union resource hub, consistently advise pricing from your real costs first, market second. |
| Business expenses | 8,000 | Everything the business pays before paying you: software, hardware, insurance, accounting, workspace. Employees get these provided; you bill for them. |
| Tax allowance % | 25 | A planning reserve for income tax and social/self-employment contributions, averaged over revenue. Obligations differ by jurisdiction — check yours; 0 shows the pre-tax figure. |
| Profit margin % | 10 | Break-even rates leave nothing for gaps between contracts, new equipment or bad months. A margin is what makes a rate sustainable. |
| Holiday weeks | 4 | Paid vacation you give yourself. An employee's leave is funded by their employer; yours is funded by your billable hours. |
| Sick days | 5 | Conservative planning value. Zero optimism is the point of an honest model. |
| Work days/week × hours/day | 5 × 8 | The widespread full-time convention. Change it if your week differs. |
| Non-billable hours/week | 6 | Invoicing, chasing payments, proposals, learning, marketing. Freelancer guides routinely warn that this time is unbilled — the model forces you to count it. See billable reality. |
| Risk buffer % (project) | 15 | Covers estimation error. Scale with uncertainty (new client, vague brief, novel task). Your own tracked estimate-vs-actual history is the best source. |
| Contingency % (project) | 10 | A separate line for unknowables, kept distinct from the risk buffer so you can see what each contributes. Quote one price; keep the breakdown internal. |
| Commitment discount % (retainer) | 10 | Optional: guaranteed income and less sales effort can justify pricing below spot rate. 0 is a perfectly good answer. |
| Unused-hours policy | Rollover with cap | Rollover (capped), expire, or prorate — whichever you pick, write it into the agreement. Contract templates such as the AIGA Standard Form of Agreement for Design Services show how schedule-based terms are structured. |
Worked example (the default numbers)
Hourly mode. Target 60,000 net + 8,000 expenses = 68,000. Gross up at 25% tax: 68,000 ÷ 0.75 = 90,666.67. Add 10% profit: 99,733.33. Time: 52 weeks − 4 holiday weeks − 5 sick days (one week) = 47 working weeks → 1,880 capacity hours; minus 47 × 6 = 282 admin hours → 1,598 billable hours (85% billable). Rate: 99,733.33 ÷ 1,598 = 62.41/hour, day rate 499.29, rounded to 65 for clean quotes.
Project mode. 60 estimated hours × 65 = 3,900 base. +15% risk buffer (585) = 4,485 subtotal. +10% contingency (448.50) → quote 4,933.50, an effective 82.23/hour — the buffer is what lets a fixed price stay fixed.
Retainer mode. 20 hours/month × 65 = 1,300 full value; a 10% commitment discount → 1,170/month (effective 58.50/hour, 14,040/year), with the rollover-with-cap policy written into the agreement.
Not financial or tax advice
This calculator is an educational model. Tax, social contributions, deductible expenses and payment rules depend on your jurisdiction and personal situation and change over time. Verify with your tax authority or a qualified professional before making decisions. See our full disclaimer.
Frequently asked questions
Why is the calculated rate higher than my old salary divided by 2,000?
Because a salary's ~2,000 paid hours are not 2,000 billable hours. Holidays, sick days, admin, sales and gaps between clients are all funded by the hours you can invoice. The calculator subtracts those hours first, then adds tax and profit, so the same target income spreads over far fewer sellable hours.
Is the tax allowance the same as my income tax rate?
No. It is a planning allowance — the share of every invoice set aside for income tax and similar obligations, averaged over the year. Actual obligations differ by country and person. If unsure, set it to 0 to see the pre-tax figure, then check your jurisdiction's rules. This tool is not tax advice.
What risk buffer should I use on fixed-price projects?
There is no universal number; buffers should grow with uncertainty. A well-understood task for an existing client needs little; a first project of a new type needs much more. Many freelancers start in the 10–25% range and adjust with experience, keeping a separate contingency line for unknowables. Track your estimate-vs-actual history and let it set the percentage.
Should I show the buffer and contingency to the client?
Quote one fixed price; keep the buffer math internal so the price survives surprises without renegotiation. Show scope in writing instead: what is included, what is explicitly out, and how changes are priced. The AIGA Standard Form of Agreement linked above is a professional-association example of that structure.
What should happen to unused retainer hours?
Decide before the retainer starts: rollover with a cap, use-it-or-lose-it, or prorate. Each trades client goodwill against predictable income. Whatever you choose, write it into the agreement — unused hours are the most common retainer dispute.
Does the calculator store or upload my numbers?
No. All math runs in your browser with plain JavaScript. Nothing is sent to a server, and refreshing the page clears your inputs.
Invoicing & accounting software (example)
Deposits, milestones and automatic payment reminders do more for cash flow than any rate tweak. Solid invoicing software makes them routine.
Check price →Related reading
- The salary×2 → ÷ billable formula explained — the derivation behind mode 1
- Hourly vs day rate vs project vs retainer — which model fits which work
- Quoting fixed-price projects safely — buffer math and scope-creep line items
- Retainers explained — types, pros and cons