Freelance Rate Calculator
Your floor rate is the lowest hourly rate you can charge and still pay yourself, cover your business costs, and pay your taxes. Enter four numbers to find it.
1. Enter your numbers
2. Your rates
| Take-home goal | — |
| + Tax on that pay (— of pay before tax) | — |
| = Pay before tax: take-home ÷ (1 − tax %) | — |
| + Business costs (deductible, so not grossed up) | — |
| = Money you need to bring in each month | — |
| ÷ Billable hours | — |
| = Floor hourly rate | — |
How this works
Floor rate = (Take-home goal ÷ (1 − tax %) + Business costs) ÷ Billable hours
Dividing your take-home by (1 − tax %) "grosses it up": it finds the pre-tax pay that leaves your goal once tax comes out. Business costs are added after that, not grossed up, because they're deductible and come off before tax.
Worked example (the default numbers): $3,000 ÷ (1 − 0.25) = $4,000 pay before tax. Add $400 of costs = $4,400 a month. Divide by 60 billable hours = $73.33/hr. Check: $4,400 − $400 costs = $4,000 profit; 25% tax is $1,000, which leaves exactly $3,000. Targets: $95.33/hr (× 1.3) and $110.00/hr (× 1.5).
The tax % is a rough planning number. Your real bill depends on where you live and your situation.
- Be honest about billable hours. Most freelancers bill far fewer hours than they work.
- Your floor is a minimum, not a price tag. Quote at or above your target when you can.
- Re-check your numbers every few months or when your costs change.
For a longer walk-through with a checklist, read How to calculate your freelance hourly rate.
Frequently asked questions
What is a freelance floor rate?
It's the lowest hourly rate you can charge and still pay yourself your take-home goal, cover your business costs, and leave enough for tax. Quoting below it means you're working at a loss. It's a minimum, not a price tag.
Why divide by (1 − tax %) instead of multiplying by the tax %?
Tax comes out of your pay before tax, not out of your take-home. To keep $3,000 after 25% tax you need $4,000 before tax, because 25% of $4,000 is $1,000. Multiplying $3,000 by 25% only adds $750 and leaves you short. Dividing by (1 − 0.25) finds the right pre-tax number.
Why aren't business costs grossed up for tax too?
Business costs are generally deductible, so they come off your income before tax is worked out. You need to earn them back, but you don't pay tax on the money that goes to them. That's why the calculator adds them after the gross-up.
How many billable hours should I enter?
Only hours you can charge a client for, per month. Email, admin, invoicing, and finding work don't count. If you have no data yet, 50 to 80 a month is a cautious starting range; track a few months and update it. Fewer billable hours means a higher floor.
What tax percentage should I use?
A rough share of your profit that goes to tax. Many freelancers start with 25 to 30% as a planning guess, but the right number depends on where you live and your situation. The tax set-aside calculator gives a rough estimate from your own numbers, and a tax professional can confirm it.
Should I quote my floor rate to clients?
Usually not. The floor is the line you don't go under. Floor × 1.3 leaves room for slow months and unpaid revisions; floor × 1.5 adds room for savings and time off. Those multipliers are rules of thumb, so check what clients in your niche pay, too.
Next steps (all free)
- Turn your floor into a day rate with the day rate converter.
- See how much of each payment to save for tax.
- Freelance Rate Cheat Sheet: this formula and the worked example on one printable page.
Prefer a spreadsheet? The paid Rate & Quote Calculator uses the same formula and adds day, week, and retainer packages plus a client quote with an "above floor?" check.
Not tax, legal, or financial advice. This calculator is a planning tool. Tax rules and rates vary by location and situation, and pricing depends on your market and skills. Check with a qualified professional before making tax or financial decisions.