Freelance hourly rate
Start from the income you want to take home in a year: the tool works backwards to the minimum hourly and day rate you should charge.
How to use it
The calculation runs backwards: you say what you want left in your pocket after a year, once tax and contributions are paid, and the tool works out the rate. The other fields are the four things people forget. Fixed costs are everything you pay in the months without clients: accountant, software, hardware you have to replace, training, insurance, a desk. Working weeks are 52 minus holidays, public holidays and sick days: four weeks off plus a handful of bank holidays and a bad flu leaves 46. Billable hours are the share of your time that actually reaches an invoice. Everything updates as you type, so you can see which number moves the result most.
The formula, in the open
It is two divisions, and we show them so you can redo the sums on paper. Step one: revenue = (target income + fixed costs) ÷ (1 − tax rate). If you want 30,000 in your pocket, carry 6,000 of costs and hand 30% of your revenue to the taxman, you need 36,000 ÷ 0.70 = 51,429 of revenue. Step two: hourly rate = revenue ÷ billable hours, where billable hours are weeks × hours per week × billable share. Forty-six weeks of 40 hours at 60% billable leaves 1,104 sellable hours: 51,429 ÷ 1,104 = 46.58 an hour. The day rate is just the hourly rate times the length of your day, because a day sold to a client is billed in full. The currency does not matter: put in your own and the same number comes out in it.
Why the billable share decides everything
The rate is inversely proportional to the billable share: halve the share and the rate doubles. The table shows it at 40, 50, 60, 70 and 80%, and it explains how two freelancers chasing the same income can end up with prices twice apart. The 60% default is not pessimism: quotes that never become jobs, email, invoicing, chasing late payers, bookkeeping, keeping your skills current and finding the next client are real hours nobody pays for. People with a few long-running clients reach 70-80%; people living on small jobs and constant pitching sit below 50%. The cost of a day off falls out of the same arithmetic: it is your yearly revenue divided by your working days, the billable day you are not going to have.
Tax and contributions: why a single percentage
The tool asks for one percentage of revenue because that keeps the result checkable by hand. The honest way to find yours is to take your last tax return and divide income tax plus compulsory social security by your turnover: that single ratio is exactly what this field wants. The presets are round starting points, not advice about any particular country, and rates vary enormously between places and legal set-ups. One structural warning: in most systems business costs are deductible, so tax lands on profit rather than on revenue. Charging the percentage against revenue, as this tool does, is the cautious side of the error, which is why the rate it gives you is a floor rather than a target.
Stated limits and a caveat
What comes out is the floor of your rate, not its market value: it says at what price your year balances against your target, not what a client would actually pay. Revenue is always excluding VAT or sales tax, which you only collect on someone else's behalf. The model ignores unpaid invoices and 90-day payment terms (keeping a 5-10% margin for them is sensible), money set aside to grow, the cash you need for next year's tax bill, and long gaps between clients. Treat it as an estimate: tax and contributions depend on your country and your legal structure, and this is not a substitute for advice from an accountant.