Most people set their price by looking at someone else and going slightly lower. That is how you end up busy and broke. This builds your rate from your own numbers — what you need, what tax takes, and the hours you can honestly sell.
What you need to earn
Work out the rate from what you need, not from what the person next to you charges.
After tax, in your pocket. Use your real living costs plus something on top.
Not your working hours. Only the hours a customer pays for.
52 minus holidays, sick days and quiet weeks.
What this tool does
It builds your hourly rate from the bottom up. It starts with what you need to take home, adds the tax that will be taken off, adds the cost of running the business, and then divides all of it by the hours you can genuinely sell in a year — not the hours you work.
That last part is where most people go wrong. They divide by forty hours a week and end up charging a rate that only works if every hour of every week is paid, which never happens. Quotes, admin, chasing invoices and empty weeks are all unpaid, and the paid hours have to carry them.
When you should use it
Before you quote your first customer, so the number is not a guess.
When you are busy all the time and still not earning enough.
Before raising your prices, to see how big a rise your numbers actually justify.
When moving from a salary to self-employment, to see what rate replaces the job.
How to read the answer
Your hourly rate — the floor, not the ceiling. Below it you are working for free somewhere in the year.
Day rate and project guide — the same number in the units customers usually think in.
Billable hours a year — often a shock. This is the honest capacity of one person, and it caps what you can ever earn by the hour.
Compared to a salary — what the same take-home would look like as employed pay, so you can see whether the leap is worth it.
Example. You want 2,500 a month in your pocket, tax takes 30%, and costs are 300 a month. That is about 3,871 a month the business must produce. With 25 billable hours a week, 46 weeks a year, and 15% of the year quiet, you have roughly 978 paid hours. The rate lands near 47 an hour. If you had divided by 40 hours a week, you would have quoted 22 and quietly gone backwards all year.
What this tool cannot tell you
It does not know your market. Your numbers give a floor; what customers will pay is a separate question, and sometimes it is higher than you think.
Tax rules differ everywhere, and self-employed contributions are often higher than employed ones. Treat the tax figure as a rough guess and check it locally.
It ignores holidays, pension and sick pay as separate items — build them into the take-home you ask for.
It assumes you sell hours. If you sell results or products, the break-even calculator fits better.
It is not advice. Nothing you type is sent anywhere or saved.
Common questions
How do I set my hourly rate as a freelancer?
Start from what you need, not from what others charge. Add tax and business costs to your target take-home, then divide by the hours you can realistically sell in a year. Compare that floor with market prices afterwards.
Why can I not just divide by 40 hours a week?
Because nobody sells 40 hours a week. Finding work, writing quotes, invoicing and admin are unpaid, and there are always quiet weeks. Most self-employed people bill between half and two thirds of their working hours.
Should I charge by the hour or by the project?
Quote projects when you can, because it stops punishing you for getting faster. But work the project price out from your hourly floor first, or you are guessing.
My rate looks too high to win any work. What now?
That usually means one of three things: your billable hours are unrealistically low, your costs are heavy, or the work you are selling cannot carry the income you want. Raising skill or narrowing to a niche moves the number more than lowering the price does.
Next step
Selling a product rather than hours? Then the number you need is the break-even point instead.