--- title: "How to set your freelance rate from what you need to earn" description: "A guide to how to set your freelance rate: start with the income you want, add tax and costs, divide by the hours you can bill, and check it against the market." author: "Wealtie Team" published: 2026-11-09 updated: 2026-11-09 category: "Income & freelancing" canonical: https://wealtie.com/blog/set-your-freelance-rate --- # How to set your freelance rate from what you need to earn Here's how to set your freelance rate: add the income you want to tax, costs and savings, then divide by the hours you can bill. On 58,000 and 1,150 billable hours, that's about 50 an hour. ## Key takeaways - Work out your rate from the income you want, plus tax, business costs and your own pension and time off. - In a worked example, 58,000 of revenue over 1,150 billable hours comes to about 50 an hour. - Billable hours are far fewer than working hours, because of admin, finding clients, holidays and sick days. - Check your calculated rate against what clients in your field pay, and adjust from there. ## How do you set your freelance rate? Start with what you need to earn and work backwards. Most people guess a rate by looking at what others charge, and then find at the end of the year that it didn't cover the tax. Three numbers go into it: what you want to take home, what the business costs, and how many hours you can bill. ## How much revenue do you need? More than your salary would be, because you're paying for things an employer would have covered. Here's a worked example in round numbers that work in any currency: | Line | Per year | | --- | --- | | What you want to take home | 40,000 | | Income tax and social contributions (varies by country) | 10,000 | | Business costs: software, equipment, insurance, accountant | 5,000 | | Your own pension, health cover, sick pay | 3,000 | | **Revenue you need** | **58,000** | The tax line depends on where you live and how you're set up, so use your own figure. [How much to set aside for taxes](https://wealtie.com/blog/set-aside-for-taxes-self-employed) goes into it. ## How many hours can you bill? Fewer than you'd think. A full-time year isn't full of client work. Take out holidays, public holidays and sick days, then take out the hours you spend on admin, invoicing, marketing and looking for the next project. In this example, 46 working weeks at 5 days a week and 5 billable hours a day comes to 1,150 hours. People who are new to freelancing often assume 8 billable hours a day, and the difference is what makes a rate look fine on paper and then fall short. If you're not sure of your own figure, track your time for a month. You'll know how much of a working day was paid for. ## What does that make your hourly rate? Divide the revenue by the billable hours. 58,000 divided by 1,150 is 50.43, so about 50 an hour. Round up: 52 gives you a bit of room for a slow month. If a client wants a day rate, multiply by the hours you'd spend for them in a day. Eight hours at 52 is 416, so about 420 a day. It's fair to charge more for a single day than for a long booking, since the short jobs carry more admin. ### Should you charge by the hour or by the project? By the hour when you can't predict the scope. By the project when you can, and particularly once you've done the same job a few times, because getting faster shouldn't mean earning less. To price a project, estimate the hours, multiply by your rate, then add a margin for the things that always take longer. Say 40 hours at 52 is 2,080. With a margin for revisions and client calls, you might quote 2,400. State what's included and what costs extra. ## How do you check it against the market? Ask what others in your field charge, then compare. Other freelancers, professional groups, and job posts that show their budgets will give you a range. If your figure's well above the range, look at the inputs. Your costs might be high, your billable hours might be low, or you might be aiming at clients who can't pay what you need. If it's well below, you've probably undercounted something, or there's room to charge more than you need. The rate you charge can't stay below your calculated number for long. ## How do you raise your rate? Give notice and put it in writing. Raise it for new clients first, since they've got nothing to compare it with. Then tell existing clients a month or two ahead, with the new rate and the date it starts. You don't have to apologise or give a long explanation. Costs have gone up, and so has your experience. Reviewing once a year means small rises and no awkward large one. ## How do you make a variable income work? Set yourself a monthly target from the same sum. Take-home of 40,000 is about 3,333 a month. When a good month comes in over that, the extra covers the slow ones. There's more in the guide on how to [budget on irregular income](https://wealtie.com/guides/irregular-income-budget), and [what to do when a client pays late](https://wealtie.com/blog/client-pays-late) deals with the timing. ## How do you track your earnings in Wealtie? Set a monthly income goal and log each payment as it arrives, and you'll see how far along you are. The [income tracker](https://wealtie.com/income-tracker) keeps it separate from your [budget tracker](https://wealtie.com/features/budgets), so a slow month for clients doesn't spoil a careful month at the shops. On Pro, income analytics show your sources, a stability score and a projection. ## Questions people ask ### How do I calculate my freelance rate? Add the income you want, your tax, business costs and your own pension and sick pay, then divide by the hours you can bill in a year. In a worked example, 58,000 over 1,150 hours is about 50 an hour. ### How many billable hours do freelancers have? Usually far fewer than 40 a week, once admin, finding clients, holidays and sick days are counted. A worked example of 5 billable hours a day for 46 weeks gives 1,150 hours a year. ### Should I charge hourly or per project? Charge hourly when the scope is unclear and per project when you can predict it, especially for work you've done before. Getting faster shouldn't mean earning less. ### How often should freelancers raise their rates? About once a year is a good habit, with a month or two's notice for existing clients. Raise rates for new clients first. *This article is general information, not financial, tax or legal advice. Your situation is your own; check the numbers that apply to you before you act on them.*