Are you pricing your freelance services by gut feeling? Most freelancers undercharge by 20-40% because they don't account for hidden costs: taxes, software subscriptions, sick days, or unbillable admin time.
The Cost-Plus Rate Formula
The math is simple:
- Start with your target annual income (e.g., $80,000)
- Add annual business expenses ($12,000)
- Add tax burden (25% of gross)
- Divide by realistic billable hours (1,440/year)
- Add profit margin (10-30%)
Result: $102/hour — not $50.
Why Billable Hours Matter
Agency life? You bill 25 hours/week. Freelancer? More like 20-30. Don't assume 40 — you'll underprice. The difference between 1,500 and 2,000 billable hours per year is a $20/hour rate swing.
Grab the Free Template
I built a Google Sheets calculator that does all this automatically. No signup required.
👉 Get the Freelance Hourly Rate Calculator (Gumroad, $25): https://microtoolsb2b.gumroad.com/l/FfT4Ry80-TIUMYc9OcO4EA==
It also includes a market rate comparison tab so you can sanity-check against other freelancers in your niche.
Happy pricing!
— MicroTools Studio
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