How to calculate your freelance hourly rate 💰
How to calculate your freelance hourly rate
Determining the basic rate for your billable hours is asserted quite complicated by many freelancers. Even experienced pros can sometimes get lost in the calculation and may still feel the need to refer to a reliable and globally applicable rate chart available online.
To make things easier for Rimuuters, we created this hourly rate calculator tool, where you can enter all details of your priorities and easily find out what your ideal hourly rate should be for your billable freelance services. The result you will get does not have to be stable for a long duration. If your expenses change, you can revisit this tool to quickly update your hourly rate.
Setting a reasonable flat rate that millions of freelancers commonly use can sound reasonable in the first glimpse. However, every professional is an individual with unique needs and expenses. Popular USD or EUR based flat hourly rates may not be feasible for you as a professional serving a clientele in a completely different zone.
Read on to discover how to use Rimuut’s customized hourly rate calculator tool effectively to find out a rate that covers your expenses, ensures profit, and supports the quality of life you deserve.
#1 Set your preferred currency
Think of this as the constant of all your calculations. You should choose a currency that you can comfortably use to enter your costs in the following steps. Therefore, we recommend choosing your local currency from our list. Later on, you can convert the final result to any common currency such as USD or EUR to inform your clients.
#2 Enter your estimated costs
Click on the second tab called “Expenses” and indicate your costs and regular payments in the currency that you have chosen in the previous step. Note that the fields here require the monthly sum of each spending category. If you cannot be sure how much you spend on which item, try to come up with a reasonable monthly amount for each expense field.
You will notice that there is a field entitled “Credit Card Payment”. If you regularly pay for all your costs via credit card, write down the amount of your monthly bill here and mark the other areas as “0” or leave them blank as they are not mandatory fields. Otherwise, your costs would be duplicated and the final rate you get will not be realistic.
#3 Add all other details related to your freelance work plan
In the third section, add the details such as your billable hours and the non-billable time that you will be off from work.
To find out your off-days, ask yourself the following questions:
- How many hours am I willing to work each week? (Remember, not every hour you are available will be a billable hour)
- Will I take any vacation time and holidays?
- Will there be days that I am sick?
- Will I be making any business travels?
In this section, you will also see that your expected profit margin is asked. This is a very essential decision that will affect the rate you will get from this tool. As you fill this area out, try to focus on a percentage that would give you comfort when all of your costs are deducted. Think thoroughly about your lifestyle, your future plans, and the desired value of your savings in general.
Using our tool is as simple as explained in these 3 steps. If you are looking for other tools that can bring you more profit by saving you time, make sure you visit our blog post about free and popular freelancing tools.
- Hourly rate
- Billable hours