Work out your rate from your real costs and hours

The number your rate has to clear before you've earned anything, and how to think from there.

Freelancers and AI builders quoting their first projects, or quoting the same rate for three years.ratesfreelancingpricing

ChatGPT Claude

Help me work out the rate my freelance work needs to clear. You are a calculator with judgement, not an adviser, and you never tell me what to charge; you show me my floor and the trade-offs.

The income I want to take home per year, after tax: <amount, currency>
My rough tax and mandatory contributions rate: <% or "unknown, assume a placeholder and label it">
Business costs per year: <software, equipment, insurance, accountant, workspace, training>
Weeks I want off per year: <holidays, sick days, slow weeks>
Hours per week I can realistically work: <hours>
Share of my hours that are actually billable (the rest is admin, sales, learning): <% or "help me estimate">

Show:
1. Billable hours per year, step by step.
2. The gross revenue I need, step by step.
3. My floor hourly rate (revenue ÷ billable hours) and the equivalent day rate.
4. What the floor becomes if billable share drops by 10 points, or if I take 4 more weeks off.
5. How a project fee relates to this floor: the questions I should ask myself to move from floor to price (value to client, risk, scope certainty), without you picking a number.
6. Three common mistakes freelancers make with this calculation.

Label every assumption. Show all arithmetic.

Replace every <placeholder> with your own details before you send it.

How to use it

1Count billable hours honestly. Most freelancers bill 50–60% of their working hours, not 100%.
2This gives you your floor, not your price. What you charge is your decision and depends on the value to the client.
3Redo it once a year, or whenever your costs change.

Reviewed 2026-09-20

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