Work Out The Lowest Rate You Can Actually Charge
A freelance rate isn't a market guess, it's a floor with a margin on top. This adds up what a year actually costs you — living costs, business costs, and the savings you need — grosses it up for tax and self-employment contributions, then divides by the hours you can genuinely bill rather than the hours you work. The result is the rate below which you are paying to work. Local only; nothing leaves the tab.
- Floor
- Annual cost grossed up for tax, divided by billable hours
- local
- What it replaces
- Copying a rate off a forum
- $0.00
- Input
- Costs, capacity, tax, and your current rate
- no card
- Output
- A floor hourly rate and a day rate
- recomputed
What you pay otherwise
| Route | What you get | Cost |
|---|---|---|
| Rate-consulting call | Someone telling you what to guess | $100+ |
| Pricing by feel | Undercharging on every project, invisibly | thousands |
| Copying a market range | Someone else's costs, not yours | wrong floor |
| This page | Your floor, from your own numbers | $0 |
The workflow
Count billable hours, not working hours
A 40-hour week is rarely 40 billable hours. Admin, pitching, invoicing, professional development and unpaid calls eat the difference — often 40% of it. Divide by the hours you actually invoice for, or the floor you get is fiction.
Work the weeks you really work, not 52
Holidays, sick days, and the quiet gaps between contracts are real. Most solo freelancers bill across 42 to 46 weeks a year. Using 52 understates your floor by roughly 15%.
Gross up before you divide, not after
Tax and self-employment contributions come out of what you earn, so the figure you divide has to be the pre-tax one. Dividing net cost by billable hours gives you a rate that leaves you short every quarter.
Treat the floor as a floor
The output is breakeven, not a target. Everything above it is the margin that covers a bad month, a client who doesn't pay, and the fact that your costs will rise. Price above the floor deliberately rather than by accident.
Worked example
Sample: 3,100/mo personal, 450/mo business, 300/mo savings Annual cost 46,200 Grossed up at 28% 64,166.67 Billable capacity 25 h/wk × 45 wks = 1,125 h Floor rate 57.04/hr → 456.30/day Current 55/hr 2,291.67 short of breakeven a year Uploaded nothing — computed in the tab
Numbers above are sample data produced by the tool's own pre-loaded example, run in the browser — not averages or measured benchmarks.
What breaks this
Dividing by working hours instead of billable hours understates your floor dramatically. Using 52 weeks ignores holiday and gaps between contracts. Forgetting savings means a month with no work has nothing behind it.
Try it now
A floor of about 57 an hour is loaded against a current rate of 55. Drop the billable hours to 18 and watch the floor climb past 75.
Open the worksheet →Go deeper: the printable worksheet
The floor is free forever. The $4 one-time tier adds:
- Printable worksheet — the full calculation on one sheet — estimate: ~10 min saved rebuilding it when costs change.
- Saved rates shelf — keep up to 6 scenarios in this browser — estimate: ~12 min saved comparing scenarios.
- Rate-rise note — the gap written up as a message to existing clients — estimate: ~20 min saved drafting.