What Should I Charge? First Rate Calculator
The lowest hourly and day rate that covers your pay, your costs and the time you cannot bill.
Fuel, insurance, software, phone. Leave empty for none.
All of them, including quotes, travel and admin.
Leave empty for 5.
Quotes, travel, admin, waiting. Leave empty for 20%.
Holiday and sick time. Leave empty for 4.
Check the rate where you live. Leave empty for none.
Licences, insurance and registration rules differ by country and place, so check yours before you start.
Type the pay you want and your hours, and the rate you need to charge appears here.
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Enter the pay you want to take home, your monthly business costs and your hours. This works out the lowest rate you can charge and still end up with that pay.
A common first mistake is to take the pay you want and divide it by every hour you work. But not every hour can be billed. Quotes, travel, admin and waiting take time, you take holidays, and some of what you earn goes on costs and tax. This tool puts all of that back in, so your first rate is a floor you can stand behind.
How it’s worked out
- Money needed per year is the pay you want, grossed up for the tax you set aside, plus a year of business costs.
- Billable hours are your hours a week times the weeks you work, minus the share of hours you cannot bill.
- Hourly rate is the money needed divided by the billable hours.
- Day rate is the hourly rate times the billable hours in a working day.
To take home $2,500 a month, with $500 a month of costs, 20% set aside for tax, 40 hours a week, 6 weeks off and 25% of hours not billable: you need about $43,500 a year and can bill about 1,380 hours, so the lowest rate is about $31.50 an hour, or about $189 a day.
Common mistakes
- Dividing your wanted pay by all your hours. Unbilled time makes the real rate much higher.
- Forgetting tax and costs. Both come out of what you charge before you see it.
- Leaving out time off. Holidays and sick days are unpaid when you are self-employed.
- Treating the result as the price. It is the floor. What customers will pay, and what others charge, also matters.
Questions
What share of my time can I not bill?
It depends on the job. Quotes, travel, admin, shopping for materials and waiting all count. The box defaults to 20% if left empty, and many people find it higher at the start. Track a week or two of your own time if you can.
What tax should I put?
Check the rates where you live, because they vary a lot. Leave it empty if you do not want it included.
Can I charge per job instead of per hour?
Yes. Work out how many hours a job takes, including the unbilled ones, and multiply by the hourly rate.
How is this different from the freelance day rate calculator?
That one starts from a yearly income target. This one also adds business costs, tax and unbilled time, which is where most new rates go wrong.
Estimates only
These are estimates and general information, not financial, tax, legal or professional advice. Costs, pay, tax and licensing rules vary by country and place, so use your own figures and check the rules where you live.
Rain stopped play. Officially research.