How to Calculate Hourly Rate as a Freelancer (US, UK, Canada) | Free Guide

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How to Calculate Your Freelance Hourly Rate (US, UK, Canada)

Undercharging is one of the most common freelancer mistakes. A solid hourly rate must cover business costs, taxes, non-billable time and leave room for profit – whether you work in the United States, United Kingdom or Canada.

Simple Hourly Rate Calculator

Desired annual take-home + business costs + tax buffer Estimated billable hours per year

Why billable hours are lower than total hours

A full-time employee might work ~1,800–2,000 hours per year. A freelancer often has only 1,000–1,400 billable hours after:

• Admin and invoicing
• Marketing and proposals
• Holidays and sick days
• Learning and unpaid calls

Country notes

• US: Factor self-employment tax and quarterly estimated taxes.
• UK: Consider Income Tax, National Insurance and possible VAT registration.
• Canada: Account for income tax and CPP/QPP contributions as self-employed.

Next steps

1. Track real billable vs non-billable time for a few weeks.
2. List all annual business expenses.
3. Use the formula above, then compare with market rates.
4. Raise rates on new clients when the number is too low.

Track billable hours and turn them into invoices for free.

Open Work Time Logger on Invoice Luxe →

This is a planning guide, not tax or financial advice. Confirm tax rates with a qualified professional in your country.