How the hourly rate calculator works
Last updated 10 November 2026
Charging by the hour is simple, but the number must cover more than the income you want. It must cover your costs and the time you cannot bill.
How it works
- Billable hours = hours a week × (52 − weeks off).
- Rate = (income + costs) × 12 ÷ billable hours ÷ (1 − tax set aside).
Worked example
With the starting figures:
- The starting figures give 1 175 billable hours a year.
- You need to earn R 348 000 a year, so the rate is R 296.17 an hour.
Billable hours and working hours
The most common reason a rate is too low is counting every working hour as billable. Time spent on admin, finding clients, quoting and learning is real work, but you cannot invoice for it.
The calculator asks only for hours you can invoice. It then takes off the weeks you will not work, such as leave, public holidays and illness. In the worked example this leaves 1 175 billable hours a year.
How to read your result
The headline is the hourly rate that covers your target income and business costs across those billable hours. The rows below show the hours in a year, the total you need to cover and a rate for an eight-hour day.
The total to cover is your monthly income plus your monthly costs, multiplied by twelve. If you set money aside for tax, the rate is raised so that what is left after that amount still meets the target.
The tax field
The tax field is optional and starts at nothing. It is a share of what you earn that you plan to put away, not a tax calculation. To see how much tax you would pay on an income, use the take-home pay calculator on this site, then enter the share you want to set aside.
What this does not cover
The rate is a floor. It is what you need, not what the market will pay. It does not include retirement saving, medical aid, provisional tax or a buffer for quiet months unless you add them to your income or costs. It also does not tell you how your rate compares with other people in your field.
Common mistakes
- Entering hours worked instead of hours you can invoice.
- Leaving out weeks off. Leave, public holidays and illness all reduce the hours you can bill.
- Forgetting business costs such as software, data, insurance and equipment.
- Entering a yearly figure in a monthly field. The income and cost fields are for one month.
- Treating the result as a price list. It is the rate you need, not what a client will agree to.
Related questions
Should I charge the same rate for every client? The calculator gives one rate for the hours and costs you enter. Whether you charge more or less for particular work is your decision.
What if I work full time for one client? Enter the hours you can bill and the weeks off you expect. The sum works the same way.
Things to watch
- The result is a floor. The market may let you charge more.
- Retirement saving, medical aid and provisional tax are on you as a freelancer.
Use the rate in the freelance pricing calculator. Read the full disclaimer.