Sales, admin, invoicing, proposals and email are not billable. 60–70% is realistic for most solo freelancers.
Charge at least
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Effective rate on all hours—
Equivalent employed salary—
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Why freelance rates look so high
An employee on 60,000 costs their employer far more than 60,000, and receives a great deal that never shows on the payslip: paid holiday, sick leave, pension contributions, equipment, software, training, insurance and the employer's share of payroll taxes. A freelancer buys all of that out of the same invoice — which is why a rate that looks generous next to an hourly salary equivalent often is not.
The calculation, in order
Gross up for tax. Take-home ÷ (1 − tax rate) gives the profit you need before tax.
Add business expenses. That total is the revenue you must invoice.
Find real billable hours. Weeks worked × hours per week × billable percentage.
Divide. Revenue ÷ billable hours = your minimum rate.
The billable-hours trap
Almost everyone divides their target by 2,080 hours and lands on a rate that quietly guarantees a shortfall. You cannot bill the hours you spend writing proposals, chasing invoices, doing your books, marketing, or learning. At 65% billable across a 46-week year of 40-hour weeks you have about 1,196 billable hours, not 2,080 — the rate that follows is 74% higher.
The number above is the rate at which you break even on the life you want. It is the point below which you should not go — not what you should quote. What you can actually charge depends on the value of the outcome, your specialism, the client's budget and how scarce your skill is. Plenty of freelancers can charge two or three times their floor; the floor just tells you when a project is quietly losing you money.
Adjustments worth making
Add a contingency of 10–20% for the gap between projects, especially in your first two years. Raise the tax percentage if you are in a high bracket or trading through a company with two layers of tax. If you take on retainers, remember they usually come at a discount to your project rate, so model them at a lower number rather than the headline one.
Start from the take-home income you want, gross it up for tax, add your annual business expenses, then divide by the hours you can genuinely bill — not the hours you work. The gap between those two numbers is what most rate calculations get wrong.
What percentage of my hours will actually be billable?
For most solo freelancers, 60–70%. New freelancers doing heavy business development often manage only 50%. Established consultants with steady repeat clients can reach 75–80%, but almost nobody sustains more than that.
Should I charge hourly or by the project?
Project pricing usually earns more, because it prices the outcome rather than your time and rewards you for working efficiently. Even so, work out your hourly floor first — it is how you check that a fixed quote is not secretly underpaid once the hours land.
How much more than an employee salary should I charge?
As a rough guide, an equivalent hourly figure of roughly 1.5 to 2 times the employed rate covers holiday, sick leave, pension, equipment and downtime. This calculator gets there from your real numbers rather than a rule of thumb.
Should I include unpaid time off in the weeks-off figure?
Yes. Count every week you will not be earning — holiday, public holidays, and a realistic allowance for illness. Freelancers who plan for zero sick days end up funding them out of their target income.