How Much Should I Charge Per Hour as a Freelancer? Find Your True Hourly Rate
Most freelancers price by picking a number that "feels right" or copying what others charge. The problem: the hourly rate on your invoice isn't what you keep per hour. To answer how much should I charge per hour, first find your true hourly rate.
Rate on paper vs. true hourly rate
Your rate on paper is income ÷ hours billed. Your true hourly rate also counts three things the invoice ignores:
- Unbilled hours: admin and bookkeeping, proposals and sales calls, unpaid revisions, learning, and setup.
- Business expenses: software, platform and payment fees, and other costs.
- Tax set-aside: the share of profit you put aside for tax.
True hourly rate = (income − expenses − tax set-aside) ÷ (billed hours + unbilled hours).
A worked example
These are the example numbers that come pre-filled in the free calculator (one month):
| Input | Example |
|---|---|
| Income | $4,000 |
| Hours billed | 60 |
| Unbilled hours (admin 8, sales 10, revisions 6, other 4) | 28 |
| Expenses (software $120, fees $200, other $80) | $400 |
| Tax set-aside | 25% |
- Rate on paper: $4,000 ÷ 60 = $66.67/hr
- Profit before tax: $4,000 − $400 = $3,600. Tax set-aside (25%): $900. Take-home: $2,700.
- Total hours: 60 + 28 = 88. True hourly rate: $2,700 ÷ 88 ≈ $30.68/hr, less than half the rate on paper.
Work backwards to the rate you should charge
Say you want to take home $50 for every hour you work. With the same 88 hours, that's $4,400 take-home. Before a 25% set-aside, you need $5,866.67 in profit, plus $400 of expenses: $6,266.67 of income. Spread over 60 billed hours, that's about $104.44 per billed hour.
You don't have to raise your rate that far in one step. Cutting unbilled hours (fewer revision rounds, a clear scope) moves the number too, and the calculator lets you test both.
Free Hourly Rate Calculator: type in your own numbers and see your true hourly rate and the rate to charge. Excel and Google Sheets. Free.
Keep checking it every month
Your rate changes as your clients, fees, and hours change. The Side Hustle Income Tracker logs real income, fees, expenses, and hours, shows your effective $/hr on a dashboard, and includes a rate calculator for new quotes.
All figures are estimates based on the numbers you enter. Not tax, legal, or financial advice.