Freelance Hourly Rate Calculator
Work out the hourly rate you need to charge to hit your target income, after accounting for time off and business overhead.
How to use this calculator
Enter your target annual income, working days, vacation/sick days, billable hours per day, and overhead percentage, then click Calculate Rate. The result is the hourly rate you need to charge to hit your target after accounting for time off and business costs.
Why "salary ÷ hours worked" gets freelance rates wrong
Employees get paid for every working hour, but freelancers only get paid for hours a client actually buys — admin work, invoicing, marketing, and slow periods aren't billable, yet they still take up real time. Dividing ₹12,00,000 by 2,080 hours (a 40-hour week all year) gives ₹577 an hour, half the ₹1,150 that the default inputs work out to.
How the rate is calculated
Billable Days = Working Days − Vacation/Sick Days. Billable Hours = Billable Days × Hours per Day. Your target income is grossed up by overhead: Income with Overhead = Income × (1 + Overhead ÷ 100). Finally, Hourly Rate = Income with Overhead ÷ Billable Hours, and Daily Rate is simply the hourly rate multiplied by billable hours per day.
Worked example
Targeting ₹12,00,000/year, with 220 working days, 20 vacation/sick days, 6 billable hours/day, and 15% overhead: billable days come to 200, and billable hours to 1,200. Grossing up the income for overhead gives ₹13,80,000, so the hourly rate is 13,80,000 ÷ 1,200 = ₹1,150/hour, or about ₹6,900 per billable day — noticeably higher than a naive 12,00,000 ÷ (220 × 6) = ₹909/hour calculation that ignores time off and overhead entirely.
Frequently Asked Questions
Why is my calculated rate higher than what I currently charge?
It usually means your current rate isn't accounting for unbillable time (admin, marketing, revisions) or business overhead (software, taxes, insurance) the way this calculator does. A rate worked out from total working hours quietly assumes every one of those hours ends up on an invoice.
What should I include in "Overhead / Expenses"?
Anything it costs to run the business that isn't your take-home pay: software subscriptions, equipment, internet, insurance, an accountant, training, and a buffer for slow months. There is no standard percentage. Add up a year of those costs, or an honest estimate, and divide by your target income: ₹1,80,000 of costs against a ₹12,00,000 target is 15%, the default here.
What if I can't realistically bill 6 hours a day?
That's why billable hours is a separate field from working days. Admin, client calls, proposals and looking for the next project all take time nobody pays for. Enter the hours you can honestly invoice; if you don't know yet, log a month of work and count only the invoiced hours. With the default inputs, 4 billable hours a day instead of 6 raises the rate from ₹1,150 to ₹1,725.
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