The formula
The calculator does three things:
- Revenue you need = (income + business costs) × (1 + buffer)
- Billable hours = (52 − weeks off) × hours per week × billable share
- Hourly rate = revenue you need ÷ billable hours
The day rate is the hourly rate times one fifth of your weekly hours.
A worked example
These are the values the calculator starts with:
| Step | Calculation | Result |
|---|---|---|
| Income plus costs | 70,000 + 9,000 | 79,000 |
| With a 10% buffer | 79,000 × 1.10 | 86,900 |
| Working hours | 45 weeks × 40 hours | 1,800 |
| Billable hours | 1,800 × 65% | 1,170 |
| Hourly rate | 86,900 ÷ 1,170 | 74.27 |
| Day rate | 74.27 × 8 | 594.19 |
Move the billable share from 65% to 50% and the rate climbs to 96.56. That single input matters more than any other, and it is the one most people guess too high.
Why billable hours are the number to get right
A freelance week is not 40 billable hours. Before a single hour reaches an invoice, you spend time on:
- finding and winning the next project
- proposals, calls and emails nobody pays for
- invoicing, bookkeeping and taxes
- keeping your skills and your tools current
- gaps between projects
If you have a year of history, measure instead of estimating: divide the hours on last year’s invoices by the hours you worked. If your work is in git, the git hours estimator gives you a rough count of coding hours from your commit history.
What other developers charge
Published numbers differ widely, because they measure different markets. Two examples:
- German-speaking market, direct clients: the Freelancer-Kompass 2026 survey by freelancermap reports a median of €95 per hour for IT freelancers and €90 for software and web development (freelancermap, July 2026).
- Global marketplace: Upwork’s cost guide puts software developers on its platform at $10 to $100 per hour: $20 to $40 for entry level, $40 to $70 for intermediate and $70 to $150 or more for expert developers (Upwork).
Use figures like these as a sanity check, not as a target. A rate that is normal in one market can be far too low to live on in another, and your own costs decide what you need.
From rate to invoice
Once you have a rate, put it to work. The invoice generator multiplies hours by your rate and produces a PDF, and the hourly invoice template shows how the result looks. If you bill for code, Git Invoice builds the invoice from your pull requests and commits.
When to raise your rate
- Your costs went up, or the buffer did not cover last year’s slow months.
- You are booked out and turning work away.
- Your billable share turned out lower than you assumed.
- You moved into work that is worth more to the client.
Announce a new rate in advance and apply it from a clear date. New clients get the new rate from the first quote.
Questions and answers
How do I calculate my freelance hourly rate?
Add the income you want to your yearly business costs, add a buffer, and divide by the number of hours you can actually bill in a year. Billable hours are far fewer than working hours: time off, admin, sales and gaps between projects all come out first.
How many billable hours does a freelancer have per year?
With seven weeks off, a 40-hour week and 65% of the time billable, it comes to 1,170 hours. At 50% billable it is 900. Use your own numbers from last year if you have them.
Can I just divide my old salary by 2,080 hours?
No. 2,080 is 52 weeks of 40 hours, all of them paid. A freelancer pays for holidays, sick days, equipment, insurance and unbilled time out of the hours that are billed, so the rate has to be clearly higher than the salary divided by 2,080.
Should I charge by the hour, by the day or per project?
Hourly suits open-ended work with a moving scope. Day rates suit on-site or full-day engagements. A project price suits clearly defined deliverables and rewards you for working efficiently. The hourly rate from this calculator is the basis for all three.
Does the rate include VAT or sales tax?
No. The result is a net rate. Where VAT, GST or sales tax applies, it is added on the invoice and passed on to the tax office.