Why your rate is higher than a salary divided by 2,080
An employee is paid for about 2,080 hours a year, including holidays, meetings and quiet days. A freelancer is only paid for billable hours, and also pays for tools, tax and platform fees out of the rate. That is why a freelance rate needs to be well above the hourly equivalent of a salary.
Billings needed = (profit needed + expenses) ÷ (1 − platform fee)
Hourly rate = billings needed ÷ (billable hours per week × weeks worked)
Example
| Line | Amount |
|---|---|
| Take-home income wanted | $50,000 |
| Profit needed before 25% tax | $66,666.67 |
| Plus business expenses | $3,000 |
| Billings needed after a 10% platform fee | $77,407.41 |
| Billable hours (25 a week × 46 weeks) | 1,150 |
| Hourly rate | $67.31 |
Without a platform fee the same income needs $60.58 an hour. The 10% fee adds $6.73 to every hour.
How billable hours change the rate
Same $50,000 take-home, 25% tax, $3,000 expenses, 10% platform fee and 46 weeks:
| Billable hours per week | Hours per year | Rate needed |
|---|---|---|
| 15 | 690 | $112.18 |
| 20 | 920 | $84.14 |
| 25 | 1,150 | $67.31 |
| 30 | 1,380 | $56.09 |
| 35 | 1,610 | $48.08 |
Platform fees
On Upwork the freelancer service fee is set per contract, from 0% to 15%. On Fiverr, sellers keep 80% of each order, a 20% fee. Type the fee for your platform under Platform fee, tax & expenses; our guide to Upwork fees explains how to find your rate.
Common mistakes
- Counting 40 billable hours a week. Finding clients, admin and unpaid revisions take time. Track a normal month and use the real number.
- Forgetting tax. No employer withholds it for you. Ask a local accountant what share of profit to set aside; in the US, the self-employment tax calculator estimates the Social Security and Medicare part.
- Leaving out time off. Holidays and sick days are unpaid, so they belong in "weeks worked".
This calculator contains no tax rates. The tax percentage is your own estimate and this page is not tax advice.
Frequently asked questions
How do I calculate my freelance hourly rate?
Divide the take-home income you want by (1 − your tax rate), add your yearly business expenses, divide by (1 − platform fee), then divide by your billable hours per year.
How many billable hours does a freelancer work?
It varies, but many full-time freelancers bill between 20 and 30 hours a week, because marketing, admin and unpaid work take the rest. Use your own tracked number.
How much should I add for Upwork or Fiverr fees?
Divide your rate by (1 − fee). To keep $60 an hour at a 10% fee, charge $66.67; at Fiverr's 20%, charge $75.
Should I charge by the hour or by the project?
Either works; the hourly rate is still the base. For a fixed-price project, multiply your rate by the hours you expect, and add a margin for revisions.
Last reviewed: November 2026 · By Muhammad Shujah Uddin Qazi · How we check rates · Fee changes tracker