What this does
Employees are paid for every hour they work. Freelancers are not: some of your time goes on finding work, doing admin and taking holidays, and you pay your own costs and tax. This works backwards from the income you want to the rate you need to charge.
How it works
- Start from the take-home income you want.
- Add your business costs and the tax on your profit, to get what you need to bill in a year.
- Take away your weeks off, then only count the share of your time you can actually bill.
- Divide. That is your hourly rate, and your day rate follows from it.
Questions people ask
Why is my rate higher than an employee's hourly pay?
Because you also pay for your own holidays, sick days, equipment and admin time, and only some of your hours can be billed.
What is a good billable percentage?
It depends on how much of your time goes on finding work and admin. 50 to 70 percent is common for freelancers. Start at 60 and adjust.
Is this exact?
No. It is a planning guide. Tax is a flat share, and rules differ by country and by how you are set up.
Is anything I type sent to a server?
No. The document is made inside your browser. Your business details and the last document are remembered on this device only, so you do not have to retype them, and you can wipe them with the link under the preview.
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