Hourly Rate Calculator.
Enter the income you want to take home, your yearly business costs, a tax reserve and the hours you can realistically bill, and this calculator tells you the hourly and day rate you need to charge in your currency.
Billable hours are the hours a client actually pays for; most freelancers bill 20 to 30 of a 40-hour week once admin, marketing and quoting are counted. Nothing you enter is sent anywhere.
Hourly Rate Calculator is a free online tool from Neweb (neweb.ai) for small businesses, with no sign-up. Enter the income you want to take home, your yearly business costs, a tax reserve and the hours you can realistically bill, and this calculator tells you the hourly and day rate you need to charge in your currency.
| Cost | Free, no account, no watermark |
|---|---|
| Built for | Freelancers and other small businesses |
| Made by | Neweb, the AI website builder and online presence manager (free plan; paid plans from $9/month billed yearly) |
Facts checked October 2026.
What you'll get.
A real example of what this tool produces. Run it above with your own inputs.
Most freelancers set their first rate by dividing an old salary by 2,000 hours and then wondering why the year ends short. The mistake is counting every working hour as billable and forgetting that a self-employed person pays their own tax, software, insurance, equipment and holidays. This calculator starts from what you actually want to take home and works upward: it adds your yearly business costs, grosses up for the share that goes to tax and contributions, and divides by the hours clients will really pay for.
The result is an hourly rate, a rounded "charge at least" figure, a day rate based on the billable hours in your day, and weekly and monthly revenue targets so you can tell in March whether the year is on track. It works in USD, GBP, EUR, CAD, AUD, NZD, SGD, AED, INR and other currencies, and it is equally useful for a designer in Melbourne, a bookkeeper in Dublin, a developer in Lagos or a photographer in Manila.
The tool is free and runs in your browser. It comes from Neweb, the AI website builder for freelancers and small businesses (free plan, paid plans from $9/month billed yearly, $19 month-to-month), because a rate is only useful once a website and a Google Business Profile start bringing in the clients who pay it.
How to use the hourly rate calculator
Pick your currency and enter the take-home income you want for the year, after tax and after business costs.
Add your yearly business expenses: software, insurance, equipment, workspace, accountant, training. Be generous; this is the number people forget.
Set a tax and contributions reserve as a percentage of gross revenue. 25 to 35 percent is a common starting point for sole traders in the US, UK, Canada and Australia, but your own rate depends on income and country.
Enter the billable hours per week you can really invoice and the weeks you will work after holidays, sick days and quiet periods.
Click Calculate my rate. Use the rounded hourly figure as your floor, the day rate for day-based quotes, and the monthly target to track the year.
Why this matters for your business
Unbilled time is the biggest hidden cost. Proposals, invoicing, bookkeeping, marketing, learning and client calls that never become a project typically eat 30 to 50 percent of a freelancer's week. A rate that ignores them is a pay cut you gave yourself.
Tax is not optional. Self-employed people in most countries pay income tax plus social or self-employment contributions on their profit. Setting money aside at a fixed percentage of every invoice, and building that percentage into the rate, is the difference between a calm tax season and a loan.
A number you can defend wins negotiations. When a client asks why you charge what you charge, "my rate covers X hours of real work, Y of costs and Z of tax" is a confident answer. Rates pulled from a forum thread are not.
Tips for better results
- Start with 20 to 25 billable hours a week, not 40; raise the figure only after you have tracked your time for three months.
- Count at least six weeks off a year: public holidays, personal leave, sick days and the inevitable quiet fortnight. Many experienced freelancers budget 44 to 46 working weeks.
- Review the tax reserve with an accountant once a year; it changes with income bands, deductions and whether you operate as a sole trader or a company.
- Round up, not down. A rate of $76.52 looks odd on a quote; $80 is easier to say and covers the surprise expenses every year brings.
- Use the day rate for on-site or workshop work, and quote fixed prices for defined projects by multiplying your rate by a realistic hour estimate plus a buffer.
- Revisit the calculator each January. If demand filled your calendar last year, raise the rate; if you had empty weeks, improve your website and lead flow before cutting it.
Example
A real-world walkthrough
A freelance brand designer in Austin wants to take home $60,000 a year. Her software, insurance, laptop depreciation and co-working desk add up to $6,000. She reserves 25 percent of gross for federal and self-employment tax, expects to bill 25 hours a week and plans to work 46 weeks.
The calculator shows she needs $88,000 in gross revenue over 1,150 billable hours, an exact rate of $76.52, a floor of $80 an hour and a day rate of $560. Her monthly target is $7,333; when April closes at $5,900 she knows early that she needs two more small projects, not a bigger loan.
Frequently asked questions
How is the hourly rate calculated?
The calculator adds your target take-home income to your yearly business expenses, then grosses that up for the tax reserve by dividing by (1 minus the tax percentage). That gives the gross revenue you must invoice in a year. It divides the gross by your billable hours per week multiplied by weeks worked to get the exact hourly rate, rounds up to the nearest 5 for a quotable figure, and multiplies the rounded rate by the hours in your billable day for a day rate.
What counts as a billable hour?
Only time a client has agreed to pay for: the design, writing, coding, consulting or on-site work itself. Hours spent quoting, emailing prospects, invoicing, bookkeeping, updating your portfolio, travelling and learning new tools are not billable even though they are essential. Most freelancers who track their time find they bill 50 to 65 percent of their working hours, which is why the default here is 25 hours of a 40-hour week.
What tax reserve should I use?
It depends on your country, your income and your business structure. In the US, UK, Canada and Australia, sole traders commonly set aside 25 to 35 percent of profit for income tax and self-employment or national insurance contributions; higher earners and those registered for VAT or GST may need more. Because this tool applies the percentage to gross revenue rather than profit, a figure in the mid-20s is a reasonable start. Ask an accountant for your own number and adjust.
Should I quote hourly or by the project?
Use the hourly rate as your internal floor and quote however the client prefers. Fixed project prices are easier for clients to approve and reward you for working efficiently, but only if you estimate hours honestly and add a buffer of 15 to 25 percent for revisions. Day rates suit workshops, on-site days and retained support. Whichever you use, check that the project total divided by the hours you expect to spend is above your calculated rate.
Does the calculator work outside the US?
Yes. It performs the same arithmetic in any of the sixteen supported currencies, including GBP, EUR, CAD, AUD, NZD, SGD, AED and INR, and the inputs are the same everywhere: desired income, costs, tax reserve and billable time. The only country-specific element is the tax percentage, which you set yourself. The example on this page uses US figures, but the method is identical for a consultant in London or a developer in Bangalore.
My calculated rate is far above what clients in my market pay. What now?
Three levers move the number: bill more hours (usually by reducing unbilled admin, not by working longer), cut expenses, or accept a lower take-home for now. If none of those closes the gap, the issue is positioning rather than arithmetic; specialists charge more than generalists in every market. A clear website, a defined niche and visible reviews raise what clients are willing to pay, which is the problem Neweb is built to solve for freelancers.
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