Freelancer Hourly Rate Calculator — What Should You Charge?

Most freelancers undercharge because they think in terms of what they used to earn as employees. The right approach is to reverse-engineer from your target income.

The freelancer rate formula

Hourly Rate = (Target Annual Income + Taxes + Business Expenses) ÷ Billable Hours per Year

Calculating billable hours

Not all working hours are billable:

• 52 weeks × 5 days = 260 working days
• Minus vacation: −15 days
• Minus holidays: −10 days
• Minus sick days: −5 days
• Available days: 230
• Hours per day: 8
• Billable percentage: 60–70% (rest is admin, marketing, learning)
• Actual billable hours: 230 × 8 × 0.65 = ~1,200 hours/year

Worked example

Target: ₹15 lakh/year take-home

• Taxes (30% bracket): ₹6.4 lakh
• Business expenses: ₹2 lakh (software, coworking, equipment)
• Health insurance: ₹50,000
• Total needed: ₹24 lakh/year

Hourly Rate = ₹24,00,000 ÷ 1,200 = ₹2,000/hour

Rate multipliers by market

Market	Multiplier
India (domestic)	1×
India (export to US/UK)	2–4×
US domestic	3–5×
Enterprise clients	1.5–2× premium
Urgent/rush work	1.5× premium

Common pricing mistakes

1. Copying employee salary — Employees get benefits, PF, insurance; you don’t
2. Ignoring non-billable time — Admin, proposals, and marketing eat 30–40% of time
3. Not raising rates — Increase 10–15% annually with experience
4. Hourly for everything — Value-based or project pricing is often better for experienced freelancers

Calculate your rate with our Freelancer Rate Calculator — accounts for taxes, vacation, and unbillable hours.