Freelance Budget Calculator / rate guide
How to set freelance rates from your budget
Most freelancers start pricing from the market and hope the numbers work out. A cleaner way is to start from the budget you actually need: the money you want to keep, the expenses you cannot avoid, and the reserves that protect you when work is uneven.
Monthly revenue target = (personal take-home + business expenses) / (1 - tax reserve - savings buffer)
Hourly rate = monthly revenue target / billable hours
The parts you need to include
Take-home pay
This is the amount you want available for rent, food, family costs, and everything else in your personal life.
Business expenses
Software, hosting, equipment, subcontractors, subscriptions, insurance, and any other cost that keeps the business running.
Reserves
Set aside tax money separately from savings or slow-season buffer money so you do not treat all revenue as spendable.
A worked example
Take-home target: 4,500 Business expenses: 850 Tax reserve: 22% Savings buffer: 6% Billable hours: 80 Monthly revenue target: 7,431 Hourly rate needed: 92.89
If your current rate is lower than that number, you can still make the math work by raising your rate, increasing your billable hours, cutting business expenses, or lowering the personal target. Most freelancers need a mix of all four.
Common mistakes
- Using total work hours instead of billable hours.
- Forgetting taxes until the end of the year.
- Ignoring software, tools, or subcontractor costs.
- Setting a rate that sounds reasonable but does not cover a slow month.
When to revisit your rate
- When your business costs change materially.
- When you lose or gain a big retainer client.
- When your billable hours fall below the level you planned for.
- When your savings or tax reserve is consistently too thin.