Hourly Rate Calculator
Calculates your minimum viable hourly rate based on annual expenses, desired profit margin, and available billable hours. Produces tiered rate recommendations for economy, standard, and premium service levels aligned with income targets.
Freelance - Hourly Rate Calculator.xlsx
Excel (.xlsx) — No macros — Works in Excel, Google Sheets, LibreOffice
What This Spreadsheet Solves
- Underpricing services due to guesswork rather than cost analysis
- Not accounting for taxes, insurance, and business overhead in rate setting
- Lacking a structured method to justify rate increases to clients
- Failing to distinguish between billable and total working hours
- Missing income targets because rates do not cover true cost of doing business
Who This Is For
- Independent freelancers setting or revising their rates
- Consultants transitioning from salaried employment to self-employment
- Freelance accountants advising solo practitioners on pricing
- Career coaches helping clients price their services
Inputs
- $Annual living expenses
- $Annual business expenses
- $Desired annual profit
- #Billable hours per week
- #Weeks worked per year
- %Effective tax rate
Outputs
- Minimum viable hourly rate
- Standard rate (with profit margin)
- Premium rate tier
- Annual income at each tier
- Required billable hours to hit income target
How Calculations Work
The calculator sums all annual expenses (living, business, taxes) and divides by total billable hours to derive the break-even rate. It then layers desired profit margin on top to produce the standard rate. Premium and economy tiers are computed as percentage offsets from the standard rate. A sensitivity table shows income outcomes at different hour/rate combinations.
Example Use Case
Scenario: A freelance designer has $48,000 in living expenses, $12,000 in business costs, wants $20,000 profit, works 30 billable hours/week for 48 weeks, and pays a 25% tax rate.
Result: Minimum viable rate: $74/hr. Standard rate (with profit): $88/hr. Premium tier: $110/hr. Annual income at standard rate: $126,720 before tax.
What You Get — 5 Sheets
Technical Details
Frequently Asked Questions
How do I estimate billable hours per week?
Track your time for 2-4 weeks. Most freelancers bill 60-70% of their total working hours. If you work 40 hours, expect 24-28 billable hours.
Should I include health insurance in business expenses?
Yes. Any cost you would not incur as a salaried employee belongs in business expenses: insurance, software, equipment, home office costs.
How often should I recalculate my rate?
At minimum annually, or whenever your expenses change significantly (new rent, new tools, tax rate change).
What if my market will not support the calculated rate?
Either reduce expenses, increase billable hours, or reposition your services to a higher-value niche that supports the rate.
Does this account for project-based pricing?
No. This calculates hourly rates only. Use the Project Pricing Calculator for fixed-bid and value-based pricing.
Download Hourly Rate Calculator
Ready to use immediately. Enter your data in the INPUT sheet, see results in OUTPUT.