Hourly rate calculator
Work out what to charge per hour as a freelancer or self-employed professional, turn a crew member's wage into a contractor billing rate, or convert hourly pay to a yearly salary and back.
Last updated · By Yasir Arfat
Freelance hourly rate calculator
Work back from the income you want to the hourly rate you need to charge clients.
- Hourly rate to charge
- $84.65
- Day rate (8 hours)
- $677
- Billable hours per year
- 1,150
- Revenue needed per year
- $97,350
Billable hours are hours you can invoice. Admin, sales and travel time are not billable, so most freelancers bill 20 to 30 hours in a full week.
Bill your hours on a timesheet invoice →Contractor labor rate calculator
Turn a crew member's wage into the hourly rate to bill customers, with labor burden, overhead and profit.
- Billing rate per hour
- $50.23
- Loaded labor cost per hour
- $36.40
- Gross profit per hour
- $13.83
Labor burden covers payroll taxes, workers' comp, insurance and benefits on top of the wage. Use your own figures; they vary by state and trade.
Use the rate on an estimate →Hourly to salary calculator
Convert an hourly rate to weekly, monthly and yearly pay, or the other way round.
- Yearly pay
- $62,400
- Monthly pay
- $5,200
- Weekly pay
- $1,200
Before tax. Fill in a yearly salary to convert it to an hourly rate instead; leave it at 0 to convert hourly to yearly.
How to work out your hourly rate
- Pick the yearly pay you want. What you want to earn before income tax, as if you were on a salary.
- Add what you now pay yourself. Self-employed people pay both halves of Social Security and Medicare tax and buy their own health cover and retirement savings.
- Add your business costs. Software, equipment, insurance, phone, vehicle, accounting and anything else the business pays for in a year.
- Count only billable hours. Hours you can put on an invoice. Admin, marketing, quoting and travel are real work but no client pays for them directly.
- Allow for time off. Holidays, sick days and quiet weeks. Most people work 44 to 48 weeks a year.
- Divide and round up. Total money needed ÷ billable hours = your minimum rate. Add a buffer for slow months and round to a clean number.
The formula: hourly rate = (pay + self-employment costs + business costs) ÷ billable hours, plus a buffer. With the default numbers above, $70,000 pay, 15% for taxes and benefits, $8,000 of costs and a 10% buffer need $97,350 a year. Over 1,150 billable hours (25 a week for 46 weeks) that is about $85 an hour.
Contractor labor rates
If you employ a crew, the rate you bill is more than the wage you pay. Labor burden covers payroll taxes, workers' comp, insurance and benefits. Overhead covers the costs of running the business that are not part of one job. Profit comes on top. Check your own burden and overhead figures with your accountant; they vary a lot by state and trade. To price materials, use the markup calculator.
Hourly to yearly pay table
Before tax, at 40 hours a week. The last column allows 6 unpaid weeks off, typical for self-employed people.
| Hourly | Weekly | Monthly | Yearly (52 wks) | Yearly (46 wks) |
|---|---|---|---|---|
| $15 | $600 | $2,600 | $31,200 | $27,600 |
| $20 | $800 | $3,467 | $41,600 | $36,800 |
| $25 | $1,000 | $4,333 | $52,000 | $46,000 |
| $30 | $1,200 | $5,200 | $62,400 | $55,200 |
| $40 | $1,600 | $6,933 | $83,200 | $73,600 |
| $50 | $2,000 | $8,667 | $104,000 | $92,000 |
| $60 | $2,400 | $10,400 | $124,800 | $110,400 |
| $75 | $3,000 | $13,000 | $156,000 | $138,000 |
| $100 | $4,000 | $17,333 | $208,000 | $184,000 |
Billing by the hour
Once you know your rate, track your hours and bill them with dates and times on a timesheet invoice. Tutors and trainers can start from the tutoring or personal training invoice. For fixed-price jobs, quote the hours inside a quote instead.
Questions about hourly rates
How do I calculate my hourly rate as a freelancer?
Add the yearly pay you want, your self-employment taxes and benefits, and your business costs. Divide by the hours you can actually bill in a year (billable hours per week × weeks worked). Add a buffer for slow months. The calculator on this page does the sum.
How many billable hours should I plan for?
Fewer than you work. Admin, sales, quoting and travel take a big share of the week, so many freelancers bill 20 to 30 hours in a 40-hour week. Plan on the low side; it is safer than charging too little.
How do contractors work out a labor rate?
Start from the wage, add labor burden (payroll taxes, workers' comp, insurance and benefits), then add overhead and profit. A $28 wage with 30% burden, 20% overhead and 15% profit bills at about $50 an hour.
How much is $30 an hour per year?
$62,400 before tax, at 40 hours a week for 52 weeks. At 46 weeks, allowing for time off without pay, it is $55,200.
How do I convert a salary to an hourly rate?
Divide the yearly salary by the hours worked in a year. For a full-time job that is usually 2,080 hours (40 × 52), so a $60,000 salary is about $28.85 an hour.
Should freelancers charge the same hourly rate as an employee earns?
No. An employee's wage does not include the employer's share of taxes, benefits, equipment or unpaid admin time. A freelancer's rate has to cover all of that, so it is usually well above the hourly pay for the same job.
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