Are you charging too little? In 2025, most freelancers underprice by 30-50% because they skip a key step: calculating their true cost of doing business.
I help freelancers set rates that actually cover their expenses and goals. Here's the simple formula:
Minimum Hourly Rate = (Desired Annual Income + Annual Overhead) / Billable Hours Per Year
But "billable hours" is where most people get it wrong. A 40-hour week might only have 20-25 billable hours once you account for emails, proposals, accounting, and marketing.
Here's a quick way to estimate:
- Desired income: \$75,000
- Monthly overhead (software, insurance, equipment): \$1,200 → \$14,400/year
- Billable hours: 25 hours/week × 48 weeks = 1,200 hours/year
- Minimum rate: (\$75,000 + \$14,400) / 1,200 = \$74.50/hour
Now add 20% margin for profit and emergencies → \$89.40/hour.
I built a free Google Sheets calculator that does all this automatically — plus compares your rate against market averages for 6 freelancer niches.
Grab the free template here: Free Freelance Rate Calculator
The full paid version adds scenario planning, break-even analysis, and a rate card generator for \$25.
What rate are you currently charging? Drop it in the comments and I'll tell you if you're leaving money on the table.
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