Set a rate that covers the hours nobody pays for.
Add up what the practice needs to earn in a year: living costs, tax, business expenses, savings, and a margin for quieter months. Divide that total by the billable hours you can realistically deliver. The result is your minimum hourly rate. Anything below it means the non-billable hours are not covered.
Your rate has to pay for the hours no client sees.
A freelance hourly rate is not a salary divided by working hours. Half or more of a typical week goes to proposals, scheduling, bookkeeping, learning, and running the practice. No client pays for that time directly.
The rate you charge for client hours must cover all of it: the billable work, the work behind it, your costs, your tax, and the margin that keeps the practice running through a quiet month.
What numbers do you need before you calculate?
Start with what the practice needs to earn in a year. Add together your living costs, income tax and social contributions, business expenses such as software and insurance, and a savings target. Include a margin for months when less work comes in.
Then estimate your billable capacity. If you have tracked a few representative weeks, use your measured billable share. If not, start with the exercise in the billable hours guide and return here with a real number.
How do you turn costs into an hourly rate?
Divide your annual target by the number of billable hours you can realistically deliver in a year. That gives you the minimum rate. Below it, the practice loses money.
For example: a target of €48,000 a year with 20 billable hours a week and 46 working weeks gives 920 billable hours. €48,000 divided by 920 is roughly €52 per hour. Using all 40 working hours in the calculation would halve the rate to €26 even though only 20 of those hours earn revenue.
The common mistake is dividing by total working hours. That produces a rate that looks competitive but cannot cover the non-billable half of the week.
What about holidays and quiet months?
Subtract the weeks you will not work: holidays, illness, professional development, and any seasonal dip in your field. A 52-week year with six weeks off leaves 46 working weeks, not 52.
Quiet months matter twice. They reduce the number of billable weeks and they are the weeks your savings have to cover. If work dips for two months each year, the remaining ten months must earn the full annual target.
How do you test the rate against past work?
Look at the effective hourly rate on finished projects. If a project earned less than your calculated minimum, either the scope grew without a price change or the estimate was too optimistic.
Phased shows the effective rate per phase: the agreed price divided by the actual hours. A phase priced at €2,700 and completed in 24 hours earned €112.50 per hour. If it took 45 hours, that fell to €60. Comparing these figures to your minimum rate shows which kinds of work are profitable and which are not.
When should you raise the rate?
Raise it when the numbers say to. If your costs have risen, the minimum rate has risen with them. If your billable share has dropped, fewer hours carry the same total. If finished projects consistently earn well above the minimum, the rate has room to move.
A rate increase does not have to apply to ongoing work. Set the new rate as the default for future projects and leave current agreements as they are. The next project carries the updated figure from the start.
Common questions
What if I mostly do fixed-price work?
The calculation is the same. A fixed price is a rate times estimated hours. If you know the minimum rate and estimate the hours honestly, the resulting price covers your costs. Track the actual hours to see whether the estimate held.
Should I charge different rates for different clients?
You can, but keep the minimum as the floor. Some work is faster because you have done it before. Some is slower because it involves learning. Per-phase rate overrides let you adjust without changing the practice default.
How do expenses factor in?
Include them in the annual target before you divide. Software, insurance, equipment, professional memberships, and workspace costs are part of what the practice needs to earn. Leaving them out produces a rate that covers your time but not your tools.
Is this on the free plan?
Free shows the effective hourly rate per phase and the workspace default rate. Pro adds the Analyse page with profitability across all projects, budget performance, and the work value chart. Every account starts with a 30-day Pro trial.