Most rate calculators ask you to start with your hours and build up to whatever income falls out the other end. This one runs the math the other direction: tell it the annual income you actually want, and it works backward to the hourly rate, day rate, and monthly revenue you need to hit that number — using your real billable days and hours, not a fantasy 8-hour, 5-day, 52-week year nobody actually bills.
How it works
The calculator chains three simple divisions. First, it spreads your target annual income across your billable days per year to get a required day rate — this is the number you'd need to clear on every single day you actually bill a client, not every day you show up to work. Second, it divides that day rate by your billable hours per day to get a required hourly rate, since a "day" of billable work is rarely a full 8 hours once you count meetings, admin, and the time between tasks that never makes it onto an invoice. Third, it divides your target income by 12 to show the monthly revenue you'd need to average to stay on pace, independent of how your days and hours are structured.
The two inputs that do the real work here are billable days per year and billable hours per day, and both are places freelancers routinely lie to themselves. Billable days per year should exclude weekends, holidays, sick time, unpaid vacation, and the days that go entirely to admin, proposals, or finding the next client — not just working days on a calendar. Billable hours per day should reflect what you actually invoice in a typical workday, which for most people is well under 8, even on a good day.
Worked example
Say you want to earn $100,000 this year, you expect 220 billable days, and you can realistically bill 6 hours on a typical working day.
- Required day rate: $100,000 ÷ 220 = $454.55
- Required hourly rate: $454.55 ÷ 6 = $75.76
- Required monthly revenue: $100,000 ÷ 12 = $8,333.33
That $75.76 hourly figure only holds if both assumptions behind it are honest. Push billable hours per day up to a rarely-achieved 8, and the same $100,000 goal only requires $56.82 an hour — a rate that looks comfortable on paper and quietly fails to pay the bills once reality supplies fewer billable hours than the spreadsheet assumed.
How to interpret your result
Treat these three numbers as a floor, not a target. They're the minimum you need to charge, invoice per day, or bring in per month to land exactly on your income goal — with zero cushion for a slow month, an unpaid invoice, or a client who churns. If you consistently invoice below the hourly or day rate shown here, the math says you will fall short of your stated goal by year end, even if individual months look fine in isolation.
These figures are also gross revenue, not take-home pay. Nothing here accounts for income tax, self-employment tax, health insurance, software, or any other cost of running a freelance business — the number you actually keep will be meaningfully lower than the number you bill. Run your result through this site's self-employment tax calculator or tax set-aside calculator to see what survives after tax, and compare it against the day rate calculator if you want to layer business costs into the rate itself.
The two inputs are also where most of the leverage sits, and where most people get generous with themselves. Bump billable days per year from a realistic 200 down to what actually happens once holidays, sick days, and slow stretches are honestly counted, and the required rate climbs fast — which is exactly why it's worth running this calculator with a pessimistic set of numbers, not an optimistic one, before you commit to a rate with a client.
Methodology & sources
The formula: requiredDayRate = targetAnnualIncome ÷ billableDaysPerYear, requiredHourlyRate = requiredDayRate ÷ billableHoursPerDay, and requiredMonthlyRevenue = targetAnnualIncome ÷ 12. Each figure is rounded to the cent, and the hourly rate is derived from the already-rounded day rate, so the two stay consistent with each other if you check the math by hand.
The billable-versus-total-hours distinction driving this calculator is a standard concept in services pricing, not a freelance-specific trick — FreshBooks' explainer on billable hours covers the same gap between hours worked and hours actually invoiced that shows up in agencies, law firms, and solo freelancers alike. The unbillable time doesn't disappear just because it isn't counted here; it's the reason your billable-hours input should be lower than you'd first guess, and the reason this calculator asks for it explicitly instead of assuming a tidy 8-hour day.