About this calculator
There are two different questions hiding behind “what's my hourly rate?”. If you're employed, it's your salary divided by the hours you're paid for. If you're freelance, it's the rate you must charge for the hours you can actually bill, which is a much smaller number of hours than a full working year.
This calculator does both, so you can see how far apart they are. Start from the income you want, allow for holiday and time between clients, and it tells you the hourly rate to quote.
Worked examples
Real numbers, worked out by the same calculator. Press “Use these numbers” to try one above.
Freelancer wanting £60,000 with £5,000 of costs
- Hourly rate to charge
- £56.28
- Billable hours per year
- 1,155
- Billable hours per week worked
- 26.25
- Total to invoice per year
- £65,000.00
To earn £60,000.00 before tax and cover £5,000.00 of costs, you need to invoice £65,000.00. Over 1,155 billable hours that's £56.28 an hour.
Employee on £45,000 a year
- Hourly rate
- £23.08
- Weekly pay
- £865.38
- Monthly pay
- £3,750.00
£45,000.00 a year over 52 weeks of 37.5 hours is £23.08 an hour.
Freelancer wanting £40,000, 40-hour weeks, 75% billable
- Hourly rate to charge
- £28.99
- Billable hours per year
- 1,380
- Billable hours per week worked
- 30
- Total to invoice per year
- £40,000.00
To earn £40,000.00 before tax and cover £0.00 of costs, you need to invoice £40,000.00. Over 1,380 billable hours that's £28.99 an hour.
How the calculation works
Employee: hourly rate = annual salary ÷ (weeks paid × hours per week). £45,000 ÷ (52 × 37.5) = £23.08 an hour.
Freelancer: billable hours = (52 − weeks off) × hours per week × share you can bill. With the defaults that's 44 × 37.5 × 70% = 1,155 hours. Hourly rate = (income wanted + business costs) ÷ billable hours. £65,000 ÷ 1,155 = £56.28 an hour.
Why a freelancer's rate is higher than a salary's
A salary of £45,000 works out at £23.08 an hour, but a freelancer wanting the same £45,000 (with no costs) needs to charge about £38.96 an hour under the default assumptions. The salary is paid for 52 weeks a year, including holiday, and the employer covers the admin, the equipment and the quiet spells. A freelancer is only paid for the hours they bill.
This is before tax. Try both modes above with your own numbers to see the gap.
Setting the billable share honestly
The 70% starting figure is a prompt to think, not a benchmark. If you're new and finding clients, it could be far lower. If you're on a long contract, it could be over 90%. Look at a few recent months and count the hours you actually invoiced, then divide by the hours you were available.
Frequently asked questions
How do I calculate my hourly rate as a freelancer?
Add the income you want and your business costs, then divide by the hours you can realistically bill in a year. That's usually well under the hours in a full working year.
How do I convert a salary to an hourly rate?
Divide the salary by the number of hours you're paid for in a year. For 37.5 hours a week over 52 weeks, that's 1,950 hours, so £45,000 is £23.08 an hour.
Why can't I just divide my salary by 2,080 hours?
That gives an employee's hourly wage. A freelancer isn't paid for holidays, sickness or time spent finding work, so the same annual income needs a higher hourly rate.
Is this rate before or after tax?
Before. It's the income you want the business to earn. Make sure your target leaves enough after tax and National Insurance, which this tool doesn't calculate.
Should I charge more than the rate this gives?
Often yes. It's the minimum that meets your target under your assumptions. Your experience, market and the value of the work all matter too.
Formulas tested against hand-worked answers. Last reviewed 29 September 2026. These calculators do arithmetic only; they are not financial, tax or legal advice.