How to set a freelance hourly rate using billable hours
A working week includes admin, sales and gaps between projects. Your hourly rate needs to reflect the hours clients actually pay for.
Open the Freelance Hourly Rate Calculator →Start with paid hours, not the length of the working week
A week of work can include enquiries, proposals, accounts, marketing and time between projects. Those hours may be necessary, but they are not always hours a client pays for. Track a representative period before treating every working hour as billable.
Use working weeks after expected time away, then a realistic number of paid hours per week. If you are starting out, calculate a range instead of treating a full diary as certain. The rate you need at 20 paid hours can be quite different from the rate you need at 30.
Put annual costs and the income target on the same basis
Add annual business expenses to the pre-tax income target entered. Include software, insurance, equipment allowances and other costs through visible assumptions. Consider what you need to allow for pension, leave and personal circumstances, while keeping professional tax calculations separate.
A £36,000 target plus £6,000 expenses gives £42,000 to recover. Across 46 weeks at 25 paid hours, there are 1,150 billable hours and a starting rate of £36.52 an hour when rounded. At 20 paid hours, that same annual amount needs £45.65.
| Paid hours/week | Working weeks | Annual billable hours | Rate for £42,000 |
|---|---|---|---|
| 20 | 46 | 920 | £45.65 |
| 25 | 46 | 1,150 | £36.52 |
| 30 | 46 | 1,380 | £30.43 |
Use the rate when checking a fixed-price quote
For a project fee, estimate the time needed for the agreed scope, including preparation, delivery and revisions. Compare the fee with the hourly amount you need to recover. Add separately purchased work, travel or other direct expenses where applicable.
After completing the project, compare planned hours with actual hours. A pattern of extra revisions or underestimated preparation is a reason to revise the scope or estimate. The calculator helps establish a starting requirement; it cannot guarantee that the market will accept the resulting rate.
A worked example
£42,000 combined target and expenses across 46 weeks of 25 billable hours requires £36.52 an hour before any additional allowance.
Before you use the result
- Record paid and unpaid business hours separately.
- Use realistic working weeks after expected time away.
- Include annual expenses on the same period basis.
- Test more than one paid-hours assumption.
- Review completed projects against their quoted hours.
Common questions
Can I use this as my take-home pay calculation?
The rate uses the pre-tax target and expenses entered. It does not calculate personal taxes, legal employment status or deductions. Use suitable professional advice and explicit allowances for those circumstances.
What if I charge by the project?
Use the hourly result as a cost-and-income reference, then estimate the whole project's scope and time. A fixed quote still needs to cover paid delivery, preparation, revisions and direct costs.
Put the numbers into practice
Freelance Hourly Rate Calculator →How to price a quote with clear scope and costs →How to allocate business overhead per product or order →How to price and plan a busy selling season →A practical calculation guide, not professional accounting, legal or tax advice. Examples are illustrative unless identified as official. Calculation methodology and limitations.