Freelance Rate Calculator

Freelancers often struggle with setting the right rates due to unaccounted expenses and non-billable hours. Harvest helps calculate accurate freelance rates by tracking all your billable and non-billable time.

What should you charge per hour?

Most freelancers and consultants dramatically undercharge. This calculator accounts for what most people miss: non-billable time, taxes, and overhead.

Target annual income

$

Working weeks per year Accounting for vacation, holidays, sick days

Hours per week

Billable time percentage

60%

Most freelancers can bill 50-70% of their time. The rest goes to admin, marketing, proposals, and learning.

Annual business expenses

$

Software, insurance, equipment, accounting, taxes beyond income tax, etc.

Your break-even rate $100

Recommended rate (+20% buffer) $120

Billable hours per week 24h

Equivalent daily rate $479

If you divided your income by total hours ($52/hr), you'd be undercharging by $48/hr. The difference comes from non-billable time and business expenses. The recommended rate adds a 20% buffer for scope creep, gaps between clients, and slow months.

How this hourly rate calculator works

It works back from the income you need to the rate you must bill, accounting for the hours you can't bill.

• Billable hours/year = working weeks × hours per week × billable %.
• Break-even rate = (target income + business expenses) ÷ billable hours.
• Recommended rate = break-even plus a 20% buffer for taxes, slow periods, and profit.

Raising your billable percentage or trimming expenses lowers the rate you need.

Freelance Rate Calculator by Harvest

See how Harvest helps calculate your ideal freelance rates by tracking time and expenses. Perfect for setting accurate rates.

Freelance Rate Calculator FAQs

• How do freelancers calculate their hourly rates?
  Freelancers calculate hourly rates by considering their desired annual income, total expenses, and estimated billable hours. A common formula is (Desired Income + Expenses) / Billable Hours, adjusted for taxes. Tools like Harvest simplify this by tracking both billable and non-billable hours, providing data for accurate calculations.

• What expenses should freelancers include in their rate calculations?
  Freelancers should include both personal and business expenses in their calculations. Personal expenses cover living costs like rent and utilities, while business expenses include software subscriptions, marketing, insurance, and office supplies. Harvest helps track these expenses, ensuring they're factored into your rate.

• How much should freelancers set aside for taxes?
  Freelancers should typically set aside 25-30% of their income for taxes, though this percentage can vary by location. It's important to include this in your rate calculations to ensure you're not underprepared when tax season arrives.

• How can Harvest help with non-billable time in rate calculations?
  Harvest tracks both billable and non-billable hours, providing a clear view of your productive time. This allows freelancers to factor in non-billable tasks like administration and client communication when calculating their rates, ensuring an accurate and sustainable rate.

• What is the average freelance hourly rate in the U.S.?
  In 2024, the average freelance hourly rate in the U.S. was $48, according to ZipRecruiter. This figure reflects the need to cover additional expenses and taxes that freelancers are responsible for, unlike salaried employees.

• How often should freelancers adjust their rates?
  Freelancers should review and adjust their rates at least once a year or whenever significant changes occur in costs, demand, or experience. Regular adjustments ensure that rates remain competitive and reflect the freelancer's growing value and expertise.

• What are the benefits of using different pricing models?
  Different pricing models offer flexibility and can maximize earnings. Hourly rates provide flexibility, project-based rates reward efficiency, retainers give steady income, and value-based pricing can increase profits based on the perceived value delivered. Harvest supports various pricing models, helping freelancers choose the best fit for their projects.

• How does Harvest support multiple pricing scenarios?
  Harvest supports multiple project types, such as Time & Materials and Fixed Fee, allowing freelancers to experiment with different pricing scenarios. This enables them to find the most profitable approach for each project type.