Business & money · free

Freelance rate calculator

Most freelancers pick a rate by guessing. This works backwards from the income you actually need.

Your numbers

Be honest about the unbillable hours. That is where most rates go wrong.

₹
Example: 1200000 — what you need to take home before tax
₹
Example: 150000 — software, phone, travel, accountant
weeks
Example: 46 — 52 minus holiday and sick days
hours
Example: 40 — total working hours, not billable ones
%
Example: 60 — the rest is admin, sales and email
%
Example: 30 — roughly what you lose to tax

What to charge

Hourly rateWhat you need to charge an hour —
Day rateAt 8 billable hours —
Billable hours a yearWhat you can actually invoice —
Unbillable hours a yearAdmin, sales, email, quotes —
You need to invoiceTotal billings before tax and costs —
Monthly retainer equivalentIf you had 3 steady clients —

Why "my salary divided by 2,000 hours" is wrong

It is the most common way freelancers set a rate, and it under-prices by roughly half. Three things it misses:

  • You do not bill every hour you work. Quotes, invoices, chasing late payment, marketing, email, admin. For most freelancers 55–65% of working hours are billable. Some months it is 40%.
  • You do not get paid holiday or sick leave. An employee gets around 5–6 weeks a year covered. You get zero.
  • You pay your own costs and your own tax. Software, laptop, phone, accountant, insurance, and the employer half of contributions.
rate = (income ÷ (1 − tax) + costs) ÷ billable hours

A worked example

You want to take home 12,00,000. Costs 1,50,000. You work 46 weeks × 40 hours = 1,840 hours, of which 60% (1,104) are billable. Tax takes 30%.

gross needed = 12,00,000 ÷ 0.70 + 1,50,000 = 18,64,286 rate = 18,64,286 ÷ 1,104 = 1,689 an hour

The naive calculation — 12,00,000 ÷ 2,080 — suggests 577 an hour. That is less than a third of what is actually required, and it is why so many freelancers work constantly and never get ahead.

Then stop selling hours

Use this number to know your floor, not to build your pricing on. Hourly billing punishes you for getting faster: the better you get, the less you earn for the same work.

Once you know your hourly floor, price the outcome instead. If a project takes you 20 hours, your floor is 20 × your rate — but what the client is buying is the result, and the result is often worth several times that. The rate tells you when to say no. It does not have to be what you put on the invoice.

Common questions

What percentage of my hours will really be billable?

For established freelancers with steady clients, 60–70%. When you are new and doing a lot of pitching, 40–50% is realistic. Track it for a month before you trust a number.

Should I include holiday in the weeks?

Yes — subtract it. If you want four weeks off and expect two weeks of illness or quiet periods, enter 46 weeks, not 52.

Is the rate what I should quote?

It is your floor, not your price. Below it you are losing money. Above it is a question of the value of the work and what the market will pay.

What tax rate should I put in?

Whatever you actually lose to income tax and self-employment contributions combined. For many freelancers that is 25–35%. Ask your accountant rather than guessing low.

Want this checked on your real account?

A tool can only work with the numbers you give it. If you want someone to look at what is actually happening in your ad account, the first conversation is free.

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