Calculate SimplyHow to use
Start with the worked example to understand the inputs, then replace every relevant value with your own figures. Use one currency and consistent units throughout. Add or remove rows where offered; irrelevant conditional fields are disabled and excluded. Select Calculate after editing. Review negative values and any “not determined” result rather than assuming every scenario must be profitable. Download a text summary or print the page for your records.
Formula and assumptions
Estimate a sustainable freelance hourly rate from annual take-home income, tax assumptions, time off and overhead. Working weeks are 52 minus days off divided by working days per week. Billable hours earn revenue; administration still consumes working time. Required revenue is target net income divided by one minus the estimated tax rate, plus annual overhead. Effective hourly pay divides net earnings at your current quote by billable and non-billable hours together. Taxes are an effective-rate scenario applied to positive profit, not jurisdiction-specific tax advice. No paid leave is assumed to generate invoices.
W = 52 − PTO / days; H = billable × W; rate = (target / (1 − tax) + 12 × overhead) / H
Worked example
Example only: replace rates with your own figures.
Inputs
- Annual take-home income target: 40000
- Billable hours per week: 25
- Non-billable hours per week: 10
- Working days per week: 5
- Days off per year: 20
- Monthly business overhead: 200
- Estimated effective tax rate: 20 %
- Current quoted hourly rate: 50
- Required hourly rate: 43.6667 USD
- Actual annual take-home: 46080 USD
- Effective net hourly pay: 27.4286 USD
- Annual billable hours: 1200 h
- Annual overhead: 2400 USD
Frequently asked questions
Are the example rates current market prices?
No. Example inputs demonstrate arithmetic, not live prices, tax rules, salary surveys or sponsor benchmarks. Enter a dated quote, bill, manufacturer specification or verified fee schedule that applies to your situation. Compare a conservative and an optimistic scenario separately.
Why is a result not determined?
Some calculations have no meaningful value when a denominator is zero, savings are non-positive, a target cannot be reached or your data do not bracket an intersection. The tool leaves that result undetermined instead of displaying infinity or inventing a recommendation. Check the method and your inputs.
Sources
Sources explain the underlying concepts, not an endorsement of this website or its results. Method review: 20 October 2026.