Freelance Rate Calculator
Work out the hourly rate to charge as a freelancer from your income goal, billable hours and overheads.
Formula last reviewed 4 August 2026 · How we verify our calculators
Rate to charge per hour
- Gross revenue needed
- ₹20,00,000
- Billable hours per year
- 1,200
Updates live as you type
Frequently asked questions
Start from your target take-home income, gross it up for overheads and taxes, then divide by the hours you can actually bill in a year. This tool does that in one step.
Freelancers spend significant time on admin, sales, invoicing and learning that clients do not pay for. Assuming 20–30 billable hours keeps your rate realistic.
Software subscriptions, hardware, internet, coworking space, insurance and professional fees. Express the total as a percentage of revenue and enter it here.
Freelancers pay their own income tax and, above the threshold, GST. Setting aside a tax buffer in your rate prevents nasty surprises at filing time.
Sixteen hundred an hour to earn twelve lakh
To take home ₹12,00,000 a year while billing 25 hours a week across 48 weeks, with 20% overheads and a 20% tax buffer, the rate to charge is ₹1,666.67 an hour. That requires gross revenue of ₹20,00,000 against 1,200 billable hours.
The figure surprises most people starting out, and the gap between ₹12 lakh desired and ₹20 lakh gross is exactly why freelancers who price against their old salary end up earning considerably less than they did as employees.
How the rate is built
Gross revenue needed = desired income ÷ (1 − overhead% − tax%) 12,00,000 ÷ (1 − 0.20 − 0.20) = 12,00,000 ÷ 0.60 = ₹20,00,000
Billable hours per year = billable hours per week × weeks worked 25 × 48 = 1,200 hours
Rate = gross revenue ÷ billable hours 20,00,000 ÷ 1,200 = ₹1,666.67 an hour
Why 25 billable hours, not 40
This is the input that most often gets set wrongly, and the error is expensive.
A freelancer working a full week does not bill 40 hours. Time goes to finding clients, writing proposals, invoicing and chasing payment, contracts and admin, learning and keeping skills current, and the general overhead of running a one-person business. Realistic billable utilisation is 50–70% of working hours — so 20 to 28 hours of a 40-hour week.
Setting this at 40 produces a rate roughly 40% too low, and the shortfall only becomes visible months later.
Similarly, 48 weeks rather than 52 accounts for holiday, illness and gaps between contracts. Assuming 52 weeks assumes you never take a break and never have a quiet fortnight.
What the overhead percentage covers
Everything you pay for that an employer previously provided: equipment and its replacement, software subscriptions, internet and phone, coworking or home-office costs, professional insurance, accounting fees, training, and the payment-gateway or platform fees that typically run 2–10%.
For most solo freelancers 15–25% is realistic. Anyone with substantial software or hardware needs should check rather than assume.
The tax buffer
Freelance income in India is business or professional income, taxed at slab rates with no TDS deducted at source in the way a salary has — so the entire liability arrives at you.
Two provisions materially change the arithmetic:
Section 44ADA presumptive taxation — for specified professionals with gross receipts up to ₹75 lakh (where at least 95% of receipts are digital), 50% of receipts may be declared as income, with the rest treated as expenses and no books required. For a freelancer with genuinely low costs, this is a substantial saving and usually the right election.
GST registration becomes mandatory above ₹20 lakh of turnover for services, and immediately for any inter-state supply. At ₹20,00,000 gross, this example sits exactly at the threshold — worth planning for rather than discovering.
Advance tax is due quarterly once liability exceeds ₹10,000, with interest under Sections 234B and 234C on shortfalls.
Reading the result
The rate is a floor, not a market price. It tells you what you must charge to reach your target under your assumptions. Whether clients will pay it is a separate question, and if the answer is no, the levers are raising billable utilisation, reducing overheads, or working on higher-value problems — not quietly accepting less.
Note also that hourly pricing caps your income at your available hours. Once the rate is established, fixed-price or value-based pricing on well-scoped work is usually how freelancers grow beyond it, because efficiency then benefits you rather than reducing your invoice.
Common mistakes
Assuming 40 billable hours a week. Real utilisation is 50–70%.
Pricing against an old salary. An employee's package includes PF, gratuity, paid leave and insurance that a freelancer funds themselves.
Forgetting the tax buffer. No one is deducting TDS on your behalf at the right rate.
Ignoring the GST threshold. ₹20 lakh of service turnover triggers mandatory registration.
Not accounting for unpaid invoices. Late and non-payment is a real cost; a buffer for it belongs in the overhead figure.