Freelance Rate & Capacity Planner
Calculate your minimum hourly rate based on expenses and income goals, then map your weekly capacity across clients. Includes utilization tracker and overwork alert. Built for solo freelancers and small agencies.
Excel • FreelancerAlmost every underpriced freelancer made the same arithmetic mistake. They took the salary they wanted, divided by 2,000 hours, and called that their rate. That number is wrong twice over. It ignores the cost of running the business, and it assumes every working hour is a paid hour. This workflow fixes both, then checks the result against tax and against how many days you can actually sell.
One example runs through every step. A solo freelancer wants $90,000 in the bank and spends $14,000 a year on software, insurance, accounting and equipment. Five-day week, one full day gone to admin and sales, about six productive hours out of a client day, six weeks off.
Step 1: Find the hourly floor, not the fantasy hourly
The naive figure is $90,000 ÷ 2,000 = $45/hr. Put the real inputs into the Billable Hours Calculator and it comes apart.
46 weeks × 4 days × 6 hrs = 1,104 billable hours
($90,000 + $14,000) ÷ 1,104 = $94.20/hr floor1,104 hours is 55% of a 2,000-hour year. The other 45% goes to holiday, admin, proposals, invoicing, bookkeeping and the hour you lose every time a call moves. Losing a third to a half of the week to non-billable work is normal for a solo operator.
So the floor is roughly $95/hr, not $45/hr. Bill below it and you cover the difference yourself, out of a savings account that never grows.
Be honest about the day count
This step gets fudged with aspirational days. If you have never billed five full days in a week, do not enter five. Took eight weeks off last year? Do not enter two. Every optimistic day lowers your floor and quietly commits you to a rate you cannot live on. And if you genuinely do not know your split, log a normal month with the Time Card Calculator, then use the measured figure.
Step 2: Convert the floor into a defensible day rate
Clients buy days, not hours. Six productive hours at the $95 floor is $570, so the example prices at a round $600/day. Check it in the Day Rate to Hourly Calculator.
$600 ÷ 6 hrs = $100/hr nominal
$600 × 184 days = $110,400 gross
− $14,000 costs = $96,400 pre-tax profit$100/hr clears the $95 floor with a 5% cushion. Now the trap. A day rate sells the whole day. If the client believes $600 buys eight hours of your attention, your real hourly is $75, and there is no room left for the admin day the whole model depends on. So define the day inside the quote: a booked day is up to six hours of focused work plus one status call. The alternative is to price eight-hour days at $800 and drop to three client days a week.
Fixed-price work uses the same floor
Quoted projects build on the same hourly figure. A 40-hour build at $100/hr with a 15% margin for scope drift comes out around $4,700 in the Job Costing Calculator. Set overhead to zero there. The $14,000 is already inside your $100 rate, and counting it twice inflates the quote and loses work you should have won.
Step 3: Check what survives tax
Pre-tax profit is not take-home. Run the $96,400 through the 1099 Tax Calculator. Two layers hit self-employment income, and on the first one there is no employer paying half.
SE tax: $96,400 × 92.35% = $89,025
$89,025 × 15.3% = $13,621
Income tax on what's left ≈ $11,300
Total federal ≈ $24,900
Take-home ≈ $71,500Income tax here is approximate and federal only. Filing status, state tax and any W-2 income all move it, which is what the calculator is for. The 15.3% SE figure is exact arithmetic: 12.4% Social Security plus 2.9% Medicare, applied to 92.35% of net earnings.
The target was $90,000. A rate that looked healthy gross lands $18,500 short. People skip this step, then wonder why a fully booked year left them broke.
Step 4: Set the capacity ceiling, then re-price
Capacity is a hard multiplication: day rate × days you can actually sell = your revenue ceiling. At $600 and 184 days that ceiling is $110,400, fixed before you talk to a single client. No amount of hustle moves it. But utilisation makes it worse, because few solo freelancers sell every available day, so plan on booking some fraction of them.
| Scenario | Gross | Pre-tax profit | Take-home (approx) |
|---|---|---|---|
| $600 × 138 days (75% booked) | $82,800 | $68,800 | ~$53,400 |
| $600 × 184 days (every day sold) | $110,400 | $96,400 | ~$71,500 |
| $775 × 184 days | $142,600 | $128,600 | ~$92,500 |
| $1,035 × 138 days | $142,800 | $128,800 | ~$92,500 |
Read the top row first. At 75% utilisation, $600/day nets barely half the target. Now the bottom two rows. Hitting $90,000 net takes about $775/day if you sell every single available day, or about $1,035/day at a realistic 75% booking rate. Re-run whichever figure applies through the day rate tool to confirm the effective hourly, then back through the tax calculator.
Note what is not on the list: working more. Reaching $90,000 net at $600/day would take roughly 232 billable days, more days than exist in a 46-week year at five days a week, and that is before you carve out any time for admin or selling. A ceiling below the target is a pricing problem. Two other levers exist. Cut the $14,000 in business costs, or shrink the non-billable half of the week so more of the same effort becomes sellable. Both work slower than a price change, and neither moves the number as far.
Re-run it every quarter
Costs creep. Your productive-hours-per-day estimate drifts, and utilisation swings with the pipeline, so re-enter the actual figures each quarter instead of trusting last January's model. Cutting admin time works like a rate increase in disguise: every hour you claw back with faster invoicing (the Free Invoice Generator handles that end) moves to the billable side of the calculation.
Related: Net 30 payment terms calculator · all freelancer tools
The business cost that gets left out most: health insurance
The $14,000 example above bundles software, liability insurance, accounting and equipment, and that's a fair list for a lot of freelancers. What it doesn't call out by name, and what genuinely trips people up when they build their own version, is health insurance. Without an employer covering part of a group plan, a self-employed person in the US buying an individual or marketplace plan can easily be looking at $400 to $900 or more a month, depending on age, location and plan tier. That's $4,800 to $10,800 a year, on its own bigger than every other line in the example combined.
Leaving it out, or lumping a small placeholder number in under "insurance" without checking a real quote, understates the business cost input and overstates every downstream number: the hourly floor, the day rate, the take-home figure. Get an actual quote before finalizing the model, not a guess, since this single line moves the floor more than almost anything else in the calculation.