How to Calculate Your Freelance Hourly Rate and Create Invoices

Freelancers frequently undercharge because they divide their target annual salary by 2,080 hours (40 hours $\times$ 52 weeks) without factoring in non-billable hours, self-employment taxes, health insurance, and operating overhead.

Calculate your rates and generate client documents:

• Determine your true hourly rate with the Hourly Rate Calculator
• Create printable PDF invoices with the Freelance Invoice Generator

The Freelance Rate Formula

$$\text{Hourly Rate} = \frac{\text{Target Salary} + \text{Taxes} + \text{Operating Expenses}}{\text{Annual Billable Hours}}$$

Estimating Billable Hours Realistically

• Total weeks worked: 48 weeks (accounting for 4 weeks of vacation/sick time).
• Typical billable ratio: 60% billable (approx. 24 hours/week), with 40% spent on marketing, bookkeeping, and client communications.
• Realistic annual billable hours: $48 \times 24 = 1,152$ hours.

Try the Hourly Rate Calculator to get your personalized rate.