Billable time is smaller than work time
Working 46 weeks at 35 hours gives 1,610 work hours. A 65% billable share leaves 1,046.5 billable hours and 563.5 hours for administration, marketing and other unpaid work.
Income goal and working capacity
Amount after modeled business expenses, reserve and fees.
Your planning allowance for tax, contingency or savings; not a tax calculation.
Exclude vacation, holidays and other planned time away.
The remaining time covers admin, marketing and unpaid work.
Reserve and fees are separate percentages of the same gross revenue. Expenses are annual fixed inputs. The eight-hour day rate assumes eight billable hours, not an eight-hour workday with administration.
Rate required by this scenario
Hourly rate, rounded up to a cent$83.91
$671.28 for 8 billable hours · $2,013.84 for 24 project hours
1,046.5Annual billable hours
563.5Annual nonbillable work hours
| Item | Value |
|---|---|
| Total annual work hours | 1,610 |
| Average billable hours per workweek | 22.8 |
| Required annual revenue | $87,804.88 |
| Revenue at rounded hourly rate | $87,811.82 |
| Reserve at rounded rate | $13,171.77 |
| Fees at rounded rate | $2,634.35 |
| Owner compensation available | $60,005.69 |
A billable share of 100% leaves no work time for administration. This rate assumes all planned billable hours are sold and collected.
Calculations run in your browser. Inputs are not uploaded or saved by this calculator.
How to use the Freelance Rate Calculator
- 01
Enter an annual owner compensation goal and annual business expenses. Choose your own revenue reserve and fee assumptions.
- 02
Enter working weeks and total work hours per week. Set the share of that time you expect to bill and collect from clients.
- 03
Review the hourly rate and capacity totals. Enter billable project hours for a project scenario, then copy or download the assumptions.
Examples
Revenue goal with reserves and fees
A 60,000.00 compensation goal plus 12,000.00 expenses, with a 15% revenue reserve and 3% fees, requires about 87,804.88 annual revenue. At 1,046.5 billable hours, the hourly rate rounds upward to 83.91.
Start with capacity you can actually sell
Annual billable hours equal working weeks × weekly work hours × billable share. Time away reduces working weeks; unpaid work reduces the billable share. The model assumes every planned billable hour is sold, invoiced and collected.
Reserve and fees use the same revenue base
Required revenue equals compensation plus expenses, divided by one minus the sum of the reserve and fee fractions. The reserve is a planning allowance of your choice, not an income-tax calculation. The hourly rate rounds upward to a cent. An eight-hour day means eight billable hours; the project figure uses your entered billable project hours.
What to know
- A planning scenario rather than a recommended market rate or tax estimate.
- Does not model progressive taxes, bad debts, variable project expenses, overtime rules or currency conversion.
Common questions
Is the reserve an estimate of my tax liability?
No. It is a percentage of gross revenue you choose to set aside. Actual taxes use their own bases, deductions and rules.
Why do reserve and fees need to total less than 100%?
The model must retain some revenue to fund compensation and expenses. A zero or negative retained share cannot fund those goals.
Can I use a 100% billable share?
Yes, but it leaves no modeled working time for unpaid tasks. Consider whether that matches the schedule you are planning.
Does the project estimate include scope changes?
Only through the project hours you enter. Add expected revisions, coordination and delivery work to those hours if they should be billed.