How to Calculate Your Freelance Hourly Rate (Simple Formula + Examples)
The most common mistake new freelancers make is copying their old salary: “I earned $20 an hour at my job, so I’ll charge $20.” A few months later they are working hard and still short of money. The reason: as a freelancer you pay your own expenses and taxes, nobody pays you for holidays, and many working hours are not billable. Here is a simple way to find a rate that actually works.
The formula
Hourly rate = (Income you want + Business expenses + Taxes) ÷ Billable hours per year
Then add platform fees on top if you work through Upwork, Fiverr or a similar site.
Step 1: Decide the income you want
Start with the yearly amount you want to take home, the same way you would think about a salary. If you think monthly, multiply by 12.
Step 2: Add your business expenses
List what your work costs you in a year: laptop and phone (spread over their lifetime), software subscriptions, internet, electricity, a workspace, courses, bank and transfer fees, and marketing. Many freelancers forget these and pay them out of their own pocket.
Step 3: Add taxes
Employees have tax taken from their salary; freelancers must set it aside themselves. The rules depend completely on your country. In the US, for example, self-employed people pay a 15.3% self-employment tax in addition to income tax. Check the rules where you live, or ask a tax adviser, and include an honest estimate.
Step 4: Count your real billable hours
| Weeks in a year | 52 |
| Minus holidays, festivals and sick days | −6 weeks |
| Working weeks | 46 |
| Hours per week | × 40 = 1,840 hours |
| Billable share (rest is admin, emails, marketing, proposals) | × 65% |
| Billable hours per year | about 1,200 |
Many full-time freelancers bill roughly 1,000–1,400 hours a year. If you are new and still building a client base, your billable share may be lower.
Example 1: a designer working for international clients
| Income goal | $24,000 a year |
| Business expenses | $2,000 |
| Tax set-aside (example 10%) | $2,600 |
| Total needed | $28,600 |
| Billable hours | 1,200 |
| Minimum hourly rate | $23.83 → round up to $25 |
Example 2: in Pakistani rupees
Income goal Rs 150,000 a month (Rs 1,800,000 a year) + Rs 150,000 expenses + Rs 195,000 tax set-aside = Rs 2,145,000. Divided by 1,200 billable hours = about Rs 1,790 an hour. At roughly Rs 277 per dollar (October 2026 example), that is about $6.50 an hour — so you know the lowest rate you can accept from a client paying in dollars.
Step 5: Add platform fees
If you work through a marketplace, the platform keeps part of every payment:
- Fiverr keeps 20% of each order. To keep $25 an hour, charge $25 ÷ 0.80 = $31.25. Check with the Fiverr fee calculator.
- Upwork charges freelancers a variable fee per contract. See what you keep with the Upwork fee calculator.
Then remember the exchange-rate margin when you withdraw dollars — see our guide to international transaction fees.
Project fees instead of hourly
For fixed-price projects, estimate the hours honestly, add 20–30% for revisions and communication, and multiply by your hourly rate. A logo you expect to take 10 hours becomes 12–13 hours × $25 = $300–$325.
Quick answer: hourly rate from a weekly salary
Divide weekly pay by weekly hours: $800 ÷ 40 hours = $20 an hour. To go the other way, use the salary to hourly calculator.
Calculate yours now
Enter your income goal, expenses, taxes and working weeks in the free freelance rate calculator. It shows your minimum hourly, daily and project rates — including platform fees — in seconds.
Tax and platform fee examples are simplified for illustration. Check current rules with your tax office and the platform’s fee pages.
Frequently asked questions
How many billable hours does a freelancer have in a year?
Usually far fewer than 2,080 (40 hours × 52 weeks). After holidays, sick days, admin, marketing and finding clients, many full-time freelancers bill roughly 1,000–1,400 hours a year.
How do I calculate an hourly rate from a weekly salary?
Divide the weekly pay by the hours worked that week. For example, $800 for a 40-hour week is $20 an hour. As a freelancer, add extra for unpaid time, expenses and taxes.
Should I include platform fees in my rate?
Yes. Fiverr keeps 20% of each order, and Upwork charges a variable fee per contract. If you want to keep $20 an hour on Fiverr, you need to charge $25 ($25 × 80% = $20).
