I built a freelance rate calculator to help you make better decisions about what you should charge clients with your freelance business. You should be able to meet your targeted income goals by using my hourly rate calculator.
Freelance Rate Calculator – Determine How Much to Make Hourly
The above hourly rate calculator is a great way to dissect the required billing rate to achieve your annual freelance income goals. I can walk through how to use the freelance rate calculator in greater detail by using a case study of making $60,000 per year.
In order to make more money, you need to dissect your goals and find a way to exceed them. Don’t make guesses about your outcomes. With freelancing, it’s a business. You just do it alone.
Not all freelance businesses are created equal. A person that designs logos might not make the same money as an SEO expert.
With that being said, an expert logo designer that views their freelance work as a business might make more than an SEO expert that simply views it as a hobby.
Use Personal Capital to not only monitor your cash flow for free but also determine what income you need to accomplish your savings goals. It’s completely free and can be a great way to build net worth in a smarter way.
How to Use the Hourly Rate Calculator
Let’s get into how to use the freelance hourly rate calculator. It’s pretty simple but might require a small tutorial to help you.
Step 1: Input Your Desired Annual Salary from Freelancing
First, input your desired gross income from freelancing that you want to target. This will help flow down to the desired input.
Step 2: Input Your Desired Numbers of Hours in a Year
Secondly, you need to input the number of hours you want to work in a year. If you work 52 weeks in a year at 40 hours per week, that is 2,080 total hours of work.
A lot of people in the United State work more than that, but do take some time off during the year.
Step 3: Determine Your Expenses / Fees
If you use a platform for freelancing, you will likely have a portion of your pay eaten up as a service fee. Some platforms charge 20% of your hourly rate or a fixed fee. I still think that is outrageous. Find ways to land clients directly. You’ll likely need to put in the dirty work of having your contracts in order in the meantime.
Secondly, you should have business expenses associated with doing your work. You need to use the most up-to-date software to perform your job at the highest level.
If you perform well, you land more clients. If you land more clients, you can charge more money. If you charge more money… You get make more money.
An example of software a freelance might use is Quickbooks to handle their back-office accounting. Or, another example is the actual execution service. For instance, you provide SEO services and you need a platform like Keysearch to do keyword research for clients.
Step 4: Digest Your Hourly Rate to Charge Clients
Finally, you will have your input as to what you need to chart your clients on an hourly basis. This needs to be a judgment call.
Here are a few tips to consider with determining the hourly rate you should charge:
- Compare your hourly rate/salary with the annual salary for your service industry.
- Determine if your engagement with a specific client is more complicated or less complicated to flex up or flex down on your hourly rate. You should view your freelance rate as an average across all your engagements.
- Be realistic if you are not working full-time. If you are working part-time, be realistic with the salary and hours worked. This is going to be a judgment call that you need to understand.
That’s really it! The freelance hourly rate calculator is a great way to understand how much you need to charge to earn XX amount of money per year.
What Hourly Rate Do You Need to Charge to Earn $60,000 Per Year?
You can use a service business to create extra income for yourself. Even if you have a full-time job. The downside? You are likely going to start out by trading time for money. As you grow, think about ways that you can push the mundane work down to others.
Want to know how much per hour is $60,000 per year? Well, that’s easy. It depends on how many hours you want to work!
Here is a scenario of how much money per hour you need to charge to make $60,00 per year.
- In order to earn $60,000 per year while working a full-time 40 hours per week for 52 weeks, that will require an hourly rate of $34.62 per hour.
- If you want to earn $60,000 per year while working part-time 20 hours per week for 52 weeks, that will require an hourly rate of, well… $69.23 per hour.
Note: Both of the above figures are on a gross basis. You will need to deduct taxes to determine your actual take-home pay of course.
See Related: Fiverr vs Upwork – What is Better?
Conclusion on Freelance Rate Calculator
My hourly rate calculator can help you make better decisions regarding your freelance business. You can use it in a variety of ways as you scale such as determining profitability for each additional hire onto your team, etc.
Scale your freelance business to start making money smarter. Use Personal Capital to ensure that you are tracking your cash flow, income and net worth. It’s completely free and will help you build wealth.
By using the hourly rate calculator, you can start to view your freelancing work as a full-blown advisory business. Move up the value chain on your hourly rate by hiring lower-level execution talent.
Ready to freelance? Now go out and land some clients!
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