Find the hourly rate required for scoped project work to fund your target take-home pay, direct costs, tax reserve, and business profit. Unlike a simple pay-divided-by-hours calculation, this tool grosses up the price for percentage-based reserves and shows the total revenue and tax cash implied by the rate.
The required hourly rate is the break-even rate for all entered goals and costs. Required revenue is the corresponding project price before any rounding.
This is a pricing model, not a guarantee of market acceptance or a substitute for jurisdiction-specific tax advice.
To keep $4,000 after $600 of direct costs while reserving 25% for tax and 10% as business profit, required revenue is $7,076.92. Across 50 billable hours, the required rate is $141.54 per hour.
Because subtracting those percentages after pricing leaves less revenue available for target pay and direct costs.
No. Include all work covered by the price, but do not count unrelated business administration unless you intentionally allocate it here.
Yes. The result can then recover direct costs plus the selected percentage reserves.
At 100% or more, no revenue remains to fund target pay and direct costs, so the equation has no finite solution.
Not necessarily. You may round up and quote a fixed fee, provided the scope and included hours remain clear.
| Variable | Meaning | Unit |
|---|---|---|
| Target take-home pay | Cash remaining for the freelancer | USD |
| Direct costs | Scope-specific outside costs | USD |
| Tax reserve | Share of required revenue | % |
| Profit margin | Business surplus share | % |
| Billable hours | Hours covered by the price | hours |