What is the Freelance Rate?
Freelance pricing fails when you divide your target income by 2,080 hours as if you were salaried. In reality only 50–65% of a freelancer's time is billable — the rest goes to pitching, admin, invoicing and unpaid revisions.
You must also gross up for tax and add business expenses before dividing. Skipping either step is why so many freelancers earn less than the salary they left.
Formula & worked example
Work backwards from what you want to keep:
Revenue needed = Pre-tax income + expenses
Rate = Revenue / (billable hours × working weeks)
Worked example: to keep ₹15,00,000 after 20% tax you need ₹18.75 lakh pre-tax, plus ₹1.5 lakh of expenses = ₹20.25 lakh of revenue. At 25 billable hours a week over 46 weeks (1,150 hours) the required rate is about ₹1,761 an hour, or roughly ₹14,100 a day.
How to use this freelance rate calculator
- Enter the income you want to actually keep after tax.
- Add real business expenses — software, hardware, internet, coworking, accounting.
- Be honest about billable hours: 20–25 a week is realistic for most solo freelancers.
- Use 46–48 working weeks to allow for holidays and dry spells.
Smart tips
- Quote project prices, not hourly. Clients buy outcomes, and fixed pricing rewards you for getting faster.
- Raise rates for new clients first. Existing clients can move at renewal without an awkward conversation.
- Add a 15–20% buffer for scope creep — it is the single biggest silent discount freelancers give.
- Register for GST once turnover crosses ₹20 lakh (₹10 lakh in some states) and quote inclusive of it.
- Keep 3–6 months of expenses in reserve. Freelance income is lumpy even when annual totals look fine.
Frequently asked questions
How do I calculate my freelance hourly rate?
Start from post-tax income, gross it up for tax, add business expenses, then divide by realistic billable hours — not total working hours.
How many billable hours can a freelancer expect?
Typically 20–25 a week, or about 1,100–1,300 a year. The rest goes to sales, admin and unpaid work.
Should I charge hourly or per project?
Per project is usually better. It rewards efficiency, is easier for clients to approve, and avoids being penalised for working quickly.
Do I need to pay GST as a freelancer?
Registration is required once turnover exceeds ₹20 lakh a year (₹10 lakh in special-category states), or immediately for certain interstate and export services.
Want the theory behind the numbers? Read our freelance guides on the Money Blog.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 30 Sep 2026. How we check these numbers.