Billable Hours Calculator
Freelancers underprice for one structural reason: they divide their income target by worked hours instead of billable ones. The admin, quoting, invoicing, and marketing hours are real but unbilled, and most solo operators genuinely bill 20 to 30 hours of a 40-hour week. This calculator solves the rate honestly: target income plus overhead, divided by the billable hours you will actually log across the weeks you will actually work.
- Billable hours per year (48 weeks × 25 h)
- 1200
- Required hourly rate
- $76.67 / hour
- What that covers
- $80,000.00 income + $12,000.00 overhead
The rate is set by billable hours, not by worked hours. Most solo operators bill 20 to 30 hours of a 40-hour week; assuming 40 is the classic way freelancers underprice by a third.
What to Know
- Utilization, the share of worked hours you can bill, runs 50% to 75% for most solo consultants and trades. The rest goes to quoting, invoicing, travel, and finding the next job.
- An $80,000 target at a naive 40 billable hours over 52 weeks prices at $38/hour; at a realistic 25 hours over 48 weeks it prices at $77 before overhead. The same goal, twice the rate.
- Overhead belongs in the rate, not in your income: software, insurance, equipment, and self-employment tax above an employee's share all have to be recovered from billable time.
- Weeks off are not free: vacation, sick days, and dry spells compress the billable year. Pricing on 48 weeks (or fewer) is what lets you actually take them.
- Tracked time is the evidence layer under all of this. A timesheet of real billable hours for a month beats any industry utilization benchmark.
Frequently Asked Questions
How many billable hours per week is realistic?
For most independents, 20 to 30 out of a 40-hour week. Above 30 sustained means admin is happening on nights and weekends. New freelancers should model 20 until their own tracked data says otherwise.
Should self-employment tax go in income or overhead?
The extra employer-side share (7.65% beyond what an employee pays) fits naturally in overhead, since it is a cost of operating. Either placement works as long as it is in the equation somewhere; leaving it out entirely is the common mistake.
What if the resulting rate looks too high for my market?
The calculator is telling you the truth about the goal, not the market. Close the gap by raising utilization (more billable hours), cutting overhead, or adjusting the income target. Cutting the rate without changing an input just moves the shortfall to year end.
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Results are general-purpose calculations, not legal, tax, or accounting advice. How our math is built and checked →