Hourly Rate Calculator
Price your time.
Price your time.
This is a simplified estimate for general information only — not financial, tax, or legal advice. Real figures vary by lender, rate, jurisdiction and your own circumstances, so confirm with a qualified professional before acting.
How to use Hourly Rate Calculator
- Enter your desired annual take-home income and business expenses
- Add billable hours per week and weeks worked per year
- Read the minimum hourly rate you need to charge
About Hourly Rate Calculator
The Hourly Rate Calculator works out the minimum hourly rate a freelancer, contractor, or tradesperson needs to charge to hit a target income. Enter your desired annual take-home income, your annual business expenses, how many billable hours you work each week, and how many weeks you work per year. It instantly returns the rate to charge, your total annual billable hours, and what you need to bill across the whole year. Change any figure and every number recalculates live.
Because it starts from an annual income figure and divides by the hours you can actually invoice, it is really a way to translate a yearly income target into an hourly number, rather than converting an existing salary straight down to a wage. It builds in the gap between the hours you work and the hours you can bill, which is why the rate it suggests is higher than simply dividing a salary by 2,080 hours. Use it to sanity-check a rate against the income you want, or to see how much you would need to bill each year at a given rate.
The figure it gives is a pre-tax, break-even rate, so it does not work out paycheck deductions or income tax on your behalf. Add a margin on top for taxes, slow periods, and profit so you are not just covering costs. Everything runs entirely in your browser, so your income and expense numbers are never uploaded, saved, or shared with anyone.
Frequently asked questions
- How is the hourly rate calculated?
- The rate is your desired annual take-home income plus your annual business expenses, divided by your total billable hours for the year. Total billable hours is your billable hours per week multiplied by the number of weeks you work per year. For example, $70,000 income plus $8,000 expenses over 1,200 billable hours (25 hrs/week x 48 weeks) works out to $65 per hour.
- How do I convert an annual salary to an hourly rate?
- Divide the salary by the number of hours you work in a year. Full-time is usually treated as 2,080 hours (40 hours a week for 52 weeks), so a $60,000 salary is about $28.85 an hour. If you are self-employed, use your billable hours instead of 2,080, which is what this calculator does, because you cannot invoice every hour you work.
- How do I turn an hourly rate into a yearly salary or annual income?
- Multiply the hourly rate by the hours you work each week, then by the weeks you work per year. At $30 an hour for 40 hours over 52 weeks that is about $62,400 a year. For freelancers, multiply by billable hours rather than total hours, since only billable time actually earns money.
- Does this show my take-home pay or paycheck after tax?
- No, it is not a paycheck calculator. It gives the pre-tax rate you need to charge, not your net pay after income tax, self-employment tax, or other deductions. To estimate take-home, subtract your expected tax rate from the result, or raise your target income figure so the rate covers your tax bill.
- How do I account for tax on my hourly rate?
- This tool treats your income figure as take-home, so enter what you want to keep after expenses. It does not calculate income or self-employment tax, which vary by location and situation. Because taxes reduce what you keep, set your rate above this minimum, or increase your desired income figure to cover your expected tax.
- What is the difference between an hourly wage and a billed hourly rate?
- An employee's hourly wage is paid for every hour worked and usually comes with benefits plus an employer covering half of the payroll tax. A freelance or contract rate has to cover your own expenses, benefits, unbillable time, and full self-employment tax, so it needs to be meaningfully higher than an equivalent wage. This calculator works out that higher freelance rate.
- What are billable hours and why not just use 40 hours a week?
- Billable hours are the hours you can actually invoice a client for, which is almost always fewer than the hours you work. Time spent on admin, marketing, quoting, invoicing, and unpaid breaks is not billable. Most freelancers only bill 40 to 60 percent of their working week, so basing your rate on billable hours gives you a realistic number.
- How many working hours are in a full year?
- A standard full-time year is 2,080 hours, which is 40 hours a week times 52 weeks, before any time off. If you take two weeks of vacation, it is closer to 2,000. Freelancers bill far fewer than this because admin, marketing, and quoting are not billable, which is why this tool asks for billable hours and weeks worked separately.
- Can I use this to find the rate I need for a target salary?
- Yes. Enter the annual income you want as your take-home figure, add your yearly expenses, and set your realistic billable hours, and the tool shows the hourly rate that reaches that income. It is the reverse of a salary-to-hourly conversion because it starts from the income you want and works back to the rate.
- Why should I add a margin on top of this rate?
- The result is a minimum break-even rate that assumes you bill every planned hour. In reality you will have slow periods, sick days, cancellations, and unbillable gaps. Adding a buffer of 15 to 30 percent above this figure helps cover those gaps, taxes, and profit so you are not just breaking even.
- Is this hourly rate calculator free to use?
- Yes, it is completely free with no account, no sign-up, and no usage limits. You can calculate as many rates as you want, as often as you like.
- Is my income and expense data uploaded or stored anywhere?
- No. The calculator runs entirely in your browser using JavaScript. Your income, expenses, and hours are never sent to a server, saved, or shared. When you close the tab, nothing is retained.