To set your freelance rate, add the income you want to your annual business costs, then divide by the hours you can realistically bill in a year. The number that ruins most calculations is billable hours. You cannot bill 40 a week, and budgeting as though you can is the single most common reason freelancers end up earning less than they did employed.
Take the annual income you want, add every business cost: software, equipment, insurance, accounting, pension, and the tax you will owe. That total is what your billable hours have to cover. Comparing yourself to someone else's rate skips this step and usually lands you below your own floor without realising.
Add holiday and sick leave explicitly. Employment hides these; freelancing does not. Four weeks off is roughly 8% of the year that earns nothing, and it has to come out of the rate.
Admin, sales calls, invoicing, proposals, and the gaps between projects are all unpaid. Most freelancers who work a full week bill closer to 25 hours than 40. Using 40 in the calculation inflates your available hours by more than half and produces a rate that quietly cannot cover your costs.
Multiply the honest figure by working weeks, not 52. Once holiday and downtime come out, a realistic year is often around 1,100 to 1,200 billable hours rather than the 2,000 the arithmetic suggests.
Day rates are easier to sell than hourly, because they stop the conversation being about how fast you work and start it being about what gets delivered. They also make it harder for a client to shave an hour here and there.
When you raise your rate, apply it to new clients and let existing ones follow at renewal. It removes the confrontation, and by the time you have the conversation you already have evidence that people pay the new number.
Try it now
Free freelance rate calculator, hourly and day rate
Add the income you want to your annual business costs, then divide by the hours you can realistically bill in a year. The honest part is the billable hours, which are usually far fewer than the hours you actually work.
Most bill closer to 25 hours a week than 40, because admin, sales, invoicing and gaps between projects are unpaid. Across a year with holiday removed that is often 1,100 to 1,200 hours, not 2,000.
No. It has to cover business costs too: software, equipment, insurance, tax, pension and time off. A rate that only matches a salary leaves you worse off than employment once those are counted.
Skip the guesswork. Kasspian finds where your first customers actually are (real people asking for what you’re building) and hands you the move to win them, with the sources behind every call.
Try it freeOne week, a dead startup and why it died. The next, a play to get your next customers.
No fluff, no spam. Unsubscribe anytime.