Freelance / solo hourly rate calculator

The calculator The hourly rate that keeps you solvent

Pricing your time so the business actually pays you is chapter one of running a One-Person AI Business: Basics →

How to read it A floor, not a promise

This is the rate below which the one-person business quietly loses money. It works backward from the life you want — the take-home you need to keep — and adds back everything that eats into a bill before it reaches you: the tax you must set aside, the expenses of running the show, and the blunt fact that you can't bill forty hours a week when a chunk of every week goes to sales, admin and email.

Read the result as a floor. It's the lowest rate that keeps you solvent at the numbers you entered. It is not what the market will pay — the market sets the ceiling, and it neither knows nor cares what your rent is. If your floor sits above what clients in your niche will pay, that's a signal to change something (fewer expenses, more billable hours, a different niche), not a number to apologise for.

The formula, in full

Gross you must bill = take-home ÷ (1 − tax ÷ 100) + expenses — grossing the take-home back up for tax, then adding the cost of running the business. Billable hours a year = billable hours a week × working weeks a year. Hourly rate = gross ÷ billable hours: the total you must bill, spread across the hours you can actually charge for.

A worked example

You want to keep $60,000, run $6,000 of expenses, set aside 25% for tax, and can bill 25 real client hours across 46 working weeks. Grossing the take-home up for tax gives $60,000 ÷ 0.75 = $80,000; add the $6,000 of expenses and you must bill $86,000 in the year. You have 25 × 46 = 1,150 billable hours to do it in. So your floor is $86,000 ÷ 1,150 = $74.78 an hour. Charge less and one of the inputs — the income, the tax, or the unpaid hours — comes out of your own pocket.

Edge cases the calculator handles

• A tax set-aside of 100% or more can't be grossed up — there'd be nothing left — so the rate shows —. Tax takes a share of income; it can't take all of it and leave a take-home.
• Zero billable hours (or zero working weeks) means there are no hours to spread the bill across, so the rate is undefined and shows —. You can't divide a target by nothing.

Common questions

Why are billable hours so far below 40 a week?

Because no one pays you to find them. Sales calls, proposals, invoicing, admin, learning, the email that never ends — none of it is billable, and for a solo operator it easily swallows a third to a half of the week. Entering a real billable figure (often 20–30, not 40) is what stops the rate coming out fantasy-low. If you assume 40 billable hours, every unbilled hour is a quiet pay cut.

What tax percentage should I put in?

A rough set-aside for your own country — income tax plus any self-employment or social contribution — not a precise figure. Rates, bands and thresholds vary by country and by how much you earn, and they change. Treat the box as a placeholder and confirm your real number with an accountant or your tax authority before you rely on it.

Is this financial or tax advice, or a guarantee of income?

No. It's arithmetic on numbers you enter, and it is not financial or tax advice. It tells you the rate your own figures require — not what any client will agree to pay, and not what you'll earn. The market sets the ceiling; this only shows you the floor.