Why use this calculator
Most freelancers charge based on what sounds reasonable, not what they actually need to earn. This calculator works backwards from your desired take-home income, accounting for tax, unpaid hours, business expenses, and holidays — giving you a data-driven rate that actually hits your financial goals.
How to use it
Enter your target annual take-home pay, how many billable hours you can realistically sell per week (not total hours — think meetings, admin, finding clients), working weeks per year after holidays, your business expenses, and your effective tax rate. The result is the minimum rate you must charge.
The formula
Required Revenue = (Target Income ÷ (1 − Tax Rate)) + Expenses. Hourly Rate = Revenue ÷ Annual Billable Hours. Rate + Super = Hourly Rate × (1 + Super Rate).
Worked examples
$80k take-home, 30 billable hrs/week, 46 weeks, $8k expenses, 27% tax
Minimum rate $87/hr — $696/day, $2,610/week revenue
$120k take-home, 25 hrs/week, 44 weeks, $15k expenses, 35% tax
Minimum rate $196/hr — well above the 'feels reasonable' $100/hr many freelancers charge
When people use it
- Setting your first freelance rate
- Reviewing whether your current rate is sustainable
- Calculating a day rate for contract work
- Deciding between permanent employment vs freelancing
Tips
- Most freelancers can only bill 60-70% of their working hours — the rest is admin and business development
- Always quote a rate that includes super if you're not setting it aside separately
- The 'true hourly rate' shows what you earn per hour of your life — compare this to a salary offer
- Increase your rate by 10-15% annually — most employees get pay rises, freelancers must negotiate them
- Don't forget to budget for no-income periods — set aside 2-3 months of expenses as a buffer
Questions people ask
- Should I include superannuation in my hourly rate?
- If you're quoting to businesses that expect to pay super on top, add 11.5% to your rate. If you're quoting an all-inclusive rate, make sure you're setting aside 11.5% of your income for super yourself.
- What is a realistic billable hours percentage?
- Most freelancers bill 60-75% of their working hours. The rest goes to admin, invoicing, prospecting, professional development, and unbillable project time. 30 billable hours from a 45-hour week is a realistic target.
- Should I charge more than the minimum rate?
- Absolutely. The minimum rate calculated here is what you need to survive at your target income. Add a 20-30% buffer for business risk, slow periods, and profit reinvestment. Your rate should also reflect your expertise and market value.