Freelance Rate Calculator
Works backwards from the income you want.
- Nothing is sent to a server
- Instant results
- Free, no sign-up
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Questions
Why can't I just divide my old salary by 2,080 hours?
Because it is wrong by a factor of two or three, which is why so many freelancers work constantly and earn less than they did employed. A salary quietly buys paid time off, every unbillable hour, the employer's half of CPP, and benefits. An $80,000 target divided by 2,080 gives $38 an hour; the real floor is usually closer to $100.
What share of my hours will actually be billable?
Most established freelancers bill 60–70% of the hours they work, and people in their first year bill far less. The rest goes on sales calls, proposals, invoicing, bookkeeping, admin and learning. That unbillable third is real work that a salary used to pay for, and it has to be recovered in the rate.
How much extra do I pay in CPP as a freelancer?
Double. Employees pay 5.95% and their employer pays the other 5.95%; self-employed people pay both halves, so 11.9% of pensionable earnings. It is deductible in part, but it is a real cost that never appeared on your pay stub as an employee, and it is easy to forget when pricing.
Is this the rate I should charge?
No — it is the floor below which you are losing money. What you can actually charge depends on the value of the work and what the market pays, and the gap between the floor and your rate is your profit. The most useful thing to do with the number is audit past projects against it; most freelancers find one demanding client has been consistently below it.
Should I charge hourly, daily or a fixed price?
Hourly punishes you for getting faster, which is a strange incentive for anyone whose skill is improving. Day rates are easier for clients to budget and stop you accounting in fifteen-minute blocks. Fixed prices are best when scope is genuinely clear and worst when it is not — scope creep comes straight out of your effective rate. Whichever you use, work out the implied hourly figure and compare it to the floor.
About freelance rate
Why your old salary is the wrong starting point
The instinct is to take the salary you want and divide by 2,080 hours. An $80,000 target becomes $38 an hour, and it is wrong by a factor of two or three — which is why so many freelancers work constantly and still earn less than they did employed.
A salary quietly buys four things a freelance rate has to cover:
- Paid time off. Holiday, statutory holidays, sick days. Six weeks off means you bill 46 weeks, not 52.
- Unbillable hours. Sales calls, proposals, invoicing, admin, bookkeeping, learning. Most freelancers bill 60–70% of the hours they work, and new ones bill far less.
- The employer’s share. Self-employed Canadians pay both halves of CPP — 11.9% rather than 5.95% — plus every business expense an employer used to absorb.
- Risk. No EI in practice, no benefits, no severance, and some invoices never get paid.
The arithmetic, worked backwards
Start with what you want to take home, gross it up for tax, add expenses, add a margin for invoices that go unpaid, and divide by the hours you can actually bill. On an $80,000 target with six weeks off, 65% billable and $12,000 of expenses, the floor lands near $100 an hour — roughly two and a half times the naive figure.
A floor, not a price
This number tells you when you are losing money. It does not tell you what to charge. Rates are set by the value of the work and what the market pays, and the gap between your floor and your rate is your actual profit.
The most useful thing to do with the figure is audit past projects against it. Most freelancers discover that one demanding client has been consistently below the floor while a quieter one has been well above — which is a pricing decision, not a mystery.
Hourly, daily or fixed?
Hourly punishes you for getting faster, which is a strange incentive for anyone whose skill is improving. Day rates are easier for clients to budget and stop you accounting for fifteen-minute blocks. Fixed prices are best when the scope is genuinely clear, and worst when it is not — scope creep on a fixed price comes directly out of your effective rate.
Whichever you use, work out the implied hourly figure and compare it to the floor above. A $4,000 fixed price is only good if the work takes 40 hours and not 90.
Related
Bill for the work with the invoice generator, or check what you would keep after tax with the income tax estimator.