Your rate has to cover the income you want, your business costs and the hours you cannot bill. Enter your numbers and the calculator shows the hourly and day rate that gets you there.
How the rate is worked out
Hourly rate = (income goal + business expenses) × (1 + buffer) ÷ billable hours. Billable hours are the weeks you actually work multiplied by the hours per week a client pays for. Most self-employed people bill 20 to 30 hours in a 40-hour week; the rest goes to quoting, invoicing, admin and travel.
| Billable hours / week | Weeks worked | Rate needed for $92,000 billed |
|---|
| 20 | 46 | $100/h |
| 25 | 46 | $80/h |
| 30 | 46 | $67/h |
| 35 | 48 | $55/h |
What the income figure should include
Use the income you want before income tax. As a self-employed person in Canada you also pay both the employee and employer share of CPP contributions and have no paid vacation, so an employee salary is not a like-for-like comparison. If you register for GST/HST, the tax is charged on top of this rate and is not part of your income.
Common questions
How do I calculate my hourly rate as a freelancer?
Add the income you want to your yearly business costs, add a buffer for slow months, and divide by the hours you can realistically bill in a year. $80,000 of income plus $12,000 of costs with a 10% buffer over 1,150 billable hours needs about $88 an hour.
How many billable hours are realistic in a year?
Many freelancers and contractors bill between 1,000 and 1,400 hours a year once holidays, sick days, quoting, admin and slow weeks are taken out. Planning on 2,080 hours (a full-time employee year) sets the rate far too low.
Should I charge a day rate or an hourly rate?
A day rate suits work where you are booked for whole days on site or with one client. Hourly suits small, variable tasks. The calculator shows both so you can quote either consistently.
Is GST included in my hourly rate?
No. If you are registered for GST/HST, the tax is added on top of your rate on the invoice and remitted to the CRA. Quote your rate before tax and show the tax as its own line.