Derive an equivalent hourly billing rate from your target annual compensation.
Calculate your hourly billing rate from any annual income target with this free hourly rate calculator.
An hourly rate calculator converts an annual income goal into an hourly rate. Divide your annual target by the number of working hours in a year to find the hourly equivalent.
For freelancers and contractors, this helps set a rate that ensures you earn what you need without doing the division manually.
A full-time employee works approximately 2,080 hours per year (52 weeks times 40 hours). Freelancers typically have fewer billable hours due to non-billable admin time.
Use 1,000 to 1,500 billable hours as a realistic estimate for freelancers working full-time.
Freelancers need higher hourly rates than employees because they must cover their own taxes, insurance, retirement, and periods of no income between projects.
As a rough guide, a freelancer's rate should be 1.5 to 2 times an equivalent employee's hourly wage to cover these additional costs.
Enter your annual income target and the number of billable hours you plan to work. The calculator shows the minimum hourly rate you need to charge.
Then compare to market rates and adjust accordingly.
Review and raise your hourly rate at least annually. Specialization, experience, and portfolio strength all justify higher rates over time.
Use the Tez Invoice free invoice generator to create professional hourly invoices at your correct rate.
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Common questions about Hourly Rate Calculator: Find Your Hourly Rate from Annual Income Goal on Tez Invoice.
Divide your annual income target by the number of billable hours per year.
Typically 1000-1500. Account for admin, marketing, and gaps between projects.
Yes. Freelancers must cover their own taxes, benefits, and income gaps. A 1.5-2x multiplier over an equivalent employee rate is common.
Yes. Free with no sign up.
Review annually. Raise when your skills and experience increase or when the market rate increases.
Yes. Completely free with no sign up and no usage limits.
Yes. Fully responsive on all devices.
No. All processing is in your browser. Nothing is sent to any server.
Yes. Designed for freelancers and businesses.
Use the free Invoice Generator on Tez Invoice.