Work backwards from the take-home pay you actually want. Add your business costs, the hours you can realistically bill, and time off — this gives you the hourly and day rate that gets you there.
Assumes a 30% tax set-aside on revenue, the same default used across FlowingPulse. Adjust for your own situation.
Now check whether that revenue actually keeps you afloat.
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Start from the take-home you want, add business expenses and a tax set-aside to get required revenue, then divide by the hours you can genuinely bill each month.
Most solo freelancers bill 20–30 hours of a 40-hour week. Sales calls, proposals, invoicing and admin are unpaid, so pricing against 40 hours leaves you short.
30% of revenue is a common working assumption, but it depends on your jurisdiction and situation. This tool shows the set-aside separately so you can plan around your own number.
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Copying a competitor's rate tells you nothing about whether it covers your life. Start at the other end: the amount you need to land in your personal account each month after tax and business costs.
Target take-home = personal monthly needs + savings goal
Revenue has to cover software, hardware, insurance, accounting, pension and tax before anything reaches you. Because tax is a share of revenue rather than a flat cost, it has to be grossed up — dividing by (1 − tax rate), not multiplying by the rate.
Required revenue = (take-home + business costs) ÷ (1 − tax rate)
A 40-hour week is not 40 billable hours. Sales calls, proposals, invoicing, admin and learning are unpaid, and holidays and sick days remove whole weeks. Most sustainable solo practices bill 20–30 hours a week.
Billable hours/mo = billable hours per week × (working weeks per year − time off) ÷ 12
Dividing required revenue by billable hours gives the hourly floor — the rate below which you are subsidising clients out of savings. The day rate follows from your billable hours in a day, which is usually 6, not 8.
Hourly rate = required revenue ÷ billable hours per month Day rate = hourly rate × billable hours per day
A designer earning $6,000/mo net wants to match that income independently, with 5 weeks off a year.
Required revenue about $9,430/mo across roughly 98 billable hours — an hourly floor near $97 and a day rate near $580. The salary equivalent people quote as '$45/hour' is well below the sustainable rate.
A developer billing $85/hour is fully booked and wants more time off rather than more money.
Required revenue about $12,000/mo over roughly 73 hours — an hourly rate near $164. Cutting from 30 to 20 billable hours is only possible with a rate rise, and the calculator shows exactly how large it has to be.
A consultant is asked for a flat fee on a project estimated at 60 hours of work.
The floor price is $6,600; quoting $8,250 with contingency absorbs the usual scope creep. Anything under $6,600 loses money once tax and unbillable admin are counted.
Tax is charged on revenue, so adding 30% to your target leaves you short: 30% of the larger number is more than 30% of the smaller one. Dividing by 0.7 produces the revenue whose post-tax remainder actually equals your target.
Use the hourly floor as the internal number and quote in whatever format the client prefers. Fixed prices should be built from estimated hours × your floor, plus 20–30% contingency for scope changes.
Yes — subcontractor payments are business costs, so add them before the tax gross-up. Your own billable hours usually fall too, because managing other people is unbillable time.
It is a common working default, not advice. Rates vary by country, entity type and income level, so check your own bracket with an accountant and treat the result as a floor rather than a guarantee.