How to set your freelance rate (and actually stick to it)
Most freelancers set their rate by looking at job boards, asking around, or picking a number that feels "about right." The problem with that approach: it anchors you to what the market will tolerate, not what you actually need to earn. This calculator works backwards from your real costs.
Why the formula starts with your salary, not the market
Every rate calculation starts with a simple question: what does it cost to run your business and pay yourself? That means your target salary plus every recurring business expense: software subscriptions, equipment depreciation, professional insurance, accounting fees, coworking space, and any other cost you carry to be operational.
Once you have that baseline, you build in a profit margin. This is not greed; it is what funds slow months, investment in your skills, and the eventual cost of replacing your laptop. Without it, you are permanently one bad quarter away from going backwards.
Working weeks and billable hours: the two numbers most freelancers get wrong
The default of 48 working weeks assumes four weeks off per year. That is conservative for most countries. If you take more holiday, or want to budget for time between contracts, reduce this number. The effect on your rate is larger than most people expect.
Billable hours per week is where the biggest mistakes happen. A full-time employee works roughly 40 hours a week. A freelancer doing 40 hours a week of billable work is not doing any sales, administration, invoicing, professional development, or business development. Those activities take time, and they do not appear on a client invoice. Thirty billable hours per week is an ambitious target; twenty-five is more realistic for most solo practitioners.
Every hour you spend not billing a client is an hour your target rate must cover. If you drop from 30 billable hours to 25, your hourly rate needs to increase by 20% to hit the same annual target. The calculator shows you this sensitivity immediately. Try adjusting the billable hours slider and watch the numbers change.
The difference between hourly, day rate, and retainer
The hourly rate is the base unit. Everything else derives from it:
- Day rate: hourly rate × 8 hours. This is the standard way to quote for shorter projects, ad-hoc days of work, or anything where time is being sold in day-sized chunks rather than continuous delivery.
- Weekly retainer: hourly rate × your billable hours per week. If a client is buying your ongoing attention across your full working week, this is the floor.
- Monthly retainer: your total annual revenue target divided by 12. This is what you need to invoice every month, on average, to hit your number. If some months you bill more and some less, this tells you what "average" looks like.
How taxes affect your rate
The calculator does not add taxes to your rate, because that would be wrong. Taxes are not a cost you charge clients; they come out of what you earn. Instead, the country selector shows you a rough estimate of what to budget for tax and social contributions in your country.
The practical implication: if your calculator says you need €80/hour, you need to set your rate at €80/hour and then budget 25–35% of what you earn for tax. Your take-home will be less than your rate. That is normal. It is why the target salary you enter in the calculator should be your after-expenses, before-tax figure (the minimum you need to live and operate), not your hoped-for take-home pay.
What to do when the number feels too high
The most common reaction to running this calculation for the first time is: "I can't charge that." A few things to consider before discounting:
- Clients pay for outcomes, not hours. A consultant who solves a €50,000 problem in two days is not expensive at €800/day.
- A lower rate does not mean more work. Clients who push back hardest on day rates are often the ones who cause the most friction on everything else too.
- Your rate sends a signal. In most markets, an unusually low rate reads as low experience or desperation, not good value.
- If the market genuinely cannot support the rate your costs require, the answer is to reduce costs or to move upmarket, not to undercharge indefinitely.
If the number looks too high relative to your current clients, check your billable hours estimate first. Increasing that to 35 hours/week will reduce your rate, but make sure that is actually achievable without burning out.
Reviewing and adjusting your rate over time
Your rate is not a fixed number. Costs increase, your skills improve, and the market changes. A good habit is to run this calculation once a year: check whether your expenses have changed, whether your target salary reflects current inflation, and whether your actual billable hours match your assumptions.
Most freelancers raise rates too rarely and by too little. An annual 3–5% increase simply keeps pace with inflation. A larger increase is often warranted when you land a major new client, complete a significant project, or move into a more specialised area of work.
For existing clients, give 60–90 days notice of a rate increase. For new clients, your new rate applies immediately. There is no reason to charge new clients the same rate you gave someone three years ago.