How to Set a Freelance Hourly Rate
A sustainable freelance rate needs to cover your desired pay, business expenses, taxes and time that cannot be billed to clients.
The basic formula
Hourly rate estimate = (Annual income goal + annual business expenses) ÷ annual billable hours
A simple example
If your income goal is $60,000, expenses are $12,000, and you expect to bill 1,150 hours a year, the base estimate is about $62.61 per billable hour before personal tax and other adjustments.
Practical tips
Estimate billable hours realistically. Include sales, admin, learning, holidays and sick time. Review your rate as your skills, demand and costs change.
Put it into practice
Use the free SoloBizKit calculators to test your assumptions and compare different scenarios. Keep your inputs and assumptions up to date as your business changes.
This guide is for general educational purposes only and is not financial, legal, accounting or tax advice. Rules and circumstances vary by location.