You should include both business and personal costs. Business costs might be rent, software, marketing, insurance and equipment. Personal costs might be living expenses, retirement savings and money for holidays and entertainment. The calculator is set up to prompt you for each of these so your rate reflects the full cost of running your freelance life.
The calculator shows you what you need to charge to cover your costs and profit target. To check if that is competitive, compare it with industry benchmarks like professional associations, salary surveys and advertised freelance jobs in your field. If your required rate is higher than the market you may need to trim costs, adjust your profit target or consider offering more specialised services that attract a higher rate.
Your break-even rate is the minimum you need to charge just to cover your business and personal costs with no profit. Your hourly rate includes the profit or savings you want each year. Charging less than your break-even rate means you are effectively losing money. Treat your break-even rate as the floor and your target hourly rate as the amount you quote.
The result is only as accurate as the figures you enter. If you underestimate your costs or overestimate how many hours you can bill your suggested rate will be too low. If you keep your numbers realistic the calculator will give you a strong starting point that you can refine as your situation changes.
Most freelancers cannot bill 100% of their working time. A common range is 50% to 70% of your total hours once you allow for admin, marketing, quoting, training and time between projects. If you are new to freelancing or in a field with lots of unpaid admin it can be safer to start with a lower billable percentage and adjust as you track your time.
Yes. Start by using the calculator to work out your minimum hourly rate. Then estimate how long a typical project will take and multiply your hourly rate by that number of hours. If you charge per word you can convert your hourly rate to a per-word rate by dividing your hourly rate by how many words you can comfortably complete in an hour.
It is a good idea to revisit your rate at least once a year or whenever your costs change significantly. You may also want to review it when you gain new skills, move into a new niche, take on bigger responsibilities or notice that demand for your services has increased. Regular reviews help make sure your rate keeps pace with your experience and inflation.
The calculator does not work out your tax for you. When you set your personal costs and profit target you can allow extra room to cover income tax, GST if applicable and other tax obligations. If you are unsure how much to allow a registered tax agent or accountant can help you estimate what percentage of your income you are likely to pay in tax.
Yes. You just enter the number of days and hours you expect to work and the percentage of those hours that will be billable. If you freelance part time you will usually have fewer billable hours across the year so the calculator may suggest a higher hourly rate to reach the same income target.
If the suggested rate feels higher than your clients will accept you have a few options. You can reduce your annual profit target, cut some discretionary costs, increase the number of billable hours you aim for or reposition your services to higher value work. You can also use the calculator result as your long-term goal and step your rates up gradually over time.
The calculator works in dollar amounts but it does not lock you to Australian figures. You can enter your costs and profit target in any currency as long as you stay consistent. If you work with overseas clients check typical rates in their market then convert your result using a current exchange rate to see how your rate compares.
You can use it as a rough guide but it is designed for solo freelancers. For an agency you would need to include staff wages, superannuation, additional insurance, larger office costs and potentially lower billable percentages across the team. The core idea is the same though. Add up all business and personal income needs then divide by the realistic number of billable hours.
You do not need to share your calculator inputs but you can explain how your rate reflects your experience, the value of the outcomes you deliver and the costs of running a professional service. Having worked through your numbers also gives you confidence to hold your ground because you know what you need to earn to run a sustainable business.
That is up to you. Some freelancers grandfather older clients on their current rate and introduce higher rates for new work. Others adjust all clients to a new rate at review time with notice. The key is to have a clear idea of the minimum rate you can accept from any client based on your calculator result and to review older arrangements that pay below that level.
I am new to UpWork, and want to work as a freelance proofreader. After working through the Hourly Rate Calculator, I am still not clear on what I should be changing for my services. Doesn’t it depend on the market value and not what I need to make? I don’t want to request some outrageous amount but I don’t want to lowball myself either.
Finder
RonJanuary 25, 2018Finder
Hi Suzanne,
Thanks for your question. Just to confirm that you’ve reached finder, a comparison website and general information service. We don’t represent Upwork or any company we feature on the site.
I’m very thrilled to know you are exploring your career options on Upwork as a proofreader and would love to guide you regarding your concern about your potential earnings.
It seems like you are more interested in the hourly contract on Upwork based on your inquiry. Though I am unsure about what you meant by changing anything for your services. Nevertheless, please keep in mind that how much you can earn will be totally up to you. Deciding on your preferred rate ultimately depends on you. You may want to evaluate your skill set and your accumulated work experience and from there decide on how much you think you deserve to get.
In addition to this, Upwork also has an alternative contract method for you in which you will be paid on a “fixed-price” depending on the completion of your assigned projects or deliverables. For more information, you may refer to the articles I’ve sent to your email about the guide in deciding for your career options.
Hope this helps!
All the best,
Ron
SuzanneJanuary 26, 2018
Thank you for your reply. Yes, I am interested in finding what I would charge for an hourly rate for my service, or time. I have read your reply and the articles you attached to your email to me, however, I am still unsure of what I should charge for my time. I fully understand that it is up to me and that I can ask for whatever I wish. Still, this is not helpful to provide a guideline for what II can realistically get. I might ask for $100 per hour, for example, and perhaps the market rate is $130 or even $15 per hour. Without knowing what other professionals with the same skill set charge – and get- I really have no idea what to set my hour rate at despite reading the articles and working through the hourly rate calculation.
Finder
JonathanFebruary 21, 2018Finder
Hi Suzanne, thanks for your reply.
I have sent you the official hourly rates from the editorial freelancers association to give you an indication of what you can charge.
Best,
Jonathan
FrancisMarch 30, 2016
How do you calculate without knowing my age and therefore the number of years I will be working?
Finder
ShirleyAugust 11, 2016Finder
Hi Francis,
Thanks for your question.
Our calculator is designed to give you a general indication of what your hourly rate should be.
If you would like to discuss your personal situation, you may want to speak to a recruitment specialist.
MariaFebruary 28, 2015
I’ve recently finished a 12 month – month by month contract of lead generation – sales/marketing account development – account management increasing the sales by 20% during this period ( on a part-time basis 3 days p/w ). My current hourly rates have been $28. p/h.
The client has since hired a full time employee to take over from me. They have requested I spend 4 full days doing a handover which includes putting together the following;
Documents outlining the processes I’ve created
Training of systems to identify trends of accounts usage of the product
My sales/marketing material – via email & phone
Meet & greet of existing accounts in the field
Q – to impart my knowledge, info and expertise prior to my departure, what is a reasonable fee to charge on an hourly rate, as I feel this warrants a higher rate than $28.00 p/h ?
Greatly appreciate anyone/everyone’s feedback on this – please.
Finder
ShirleyMarch 2, 2015Finder
Hi Maria,
Thanks for your question.
Please note that finder.com.au is an online comparison service and is only licenced to provide general advice. Our calculator is based on general information and does not take into account your personal situation.
Your question is best answered by a recruitment specialist or employment agency who is able to advise on a rate that is best for you.
You can also use our calculator above this page to help give you an indication.
If you run a business from home you need to make sure your business is properly insured. Read our guide to this specific type of business insurance and learn how to cover your home business.
When faulty products cause injury or loss, your business needs to protect itself with product liability insurance. Learn how product liability cover works and get quotes.
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I am new to UpWork, and want to work as a freelance proofreader. After working through the Hourly Rate Calculator, I am still not clear on what I should be changing for my services. Doesn’t it depend on the market value and not what I need to make? I don’t want to request some outrageous amount but I don’t want to lowball myself either.
Hi Suzanne,
Thanks for your question. Just to confirm that you’ve reached finder, a comparison website and general information service. We don’t represent Upwork or any company we feature on the site.
I’m very thrilled to know you are exploring your career options on Upwork as a proofreader and would love to guide you regarding your concern about your potential earnings.
It seems like you are more interested in the hourly contract on Upwork based on your inquiry. Though I am unsure about what you meant by changing anything for your services. Nevertheless, please keep in mind that how much you can earn will be totally up to you. Deciding on your preferred rate ultimately depends on you. You may want to evaluate your skill set and your accumulated work experience and from there decide on how much you think you deserve to get.
In addition to this, Upwork also has an alternative contract method for you in which you will be paid on a “fixed-price” depending on the completion of your assigned projects or deliverables. For more information, you may refer to the articles I’ve sent to your email about the guide in deciding for your career options.
Hope this helps!
All the best,
Ron
Thank you for your reply. Yes, I am interested in finding what I would charge for an hourly rate for my service, or time. I have read your reply and the articles you attached to your email to me, however, I am still unsure of what I should charge for my time. I fully understand that it is up to me and that I can ask for whatever I wish. Still, this is not helpful to provide a guideline for what II can realistically get. I might ask for $100 per hour, for example, and perhaps the market rate is $130 or even $15 per hour. Without knowing what other professionals with the same skill set charge – and get- I really have no idea what to set my hour rate at despite reading the articles and working through the hourly rate calculation.
Hi Suzanne, thanks for your reply.
I have sent you the official hourly rates from the editorial freelancers association to give you an indication of what you can charge.
Best,
Jonathan
How do you calculate without knowing my age and therefore the number of years I will be working?
Hi Francis,
Thanks for your question.
Our calculator is designed to give you a general indication of what your hourly rate should be.
If you would like to discuss your personal situation, you may want to speak to a recruitment specialist.
I’ve recently finished a 12 month – month by month contract of lead generation – sales/marketing account development – account management increasing the sales by 20% during this period ( on a part-time basis 3 days p/w ). My current hourly rates have been $28. p/h.
The client has since hired a full time employee to take over from me. They have requested I spend 4 full days doing a handover which includes putting together the following;
Documents outlining the processes I’ve created
Training of systems to identify trends of accounts usage of the product
My sales/marketing material – via email & phone
Meet & greet of existing accounts in the field
Q – to impart my knowledge, info and expertise prior to my departure, what is a reasonable fee to charge on an hourly rate, as I feel this warrants a higher rate than $28.00 p/h ?
Greatly appreciate anyone/everyone’s feedback on this – please.
Hi Maria,
Thanks for your question.
Please note that finder.com.au is an online comparison service and is only licenced to provide general advice. Our calculator is based on general information and does not take into account your personal situation.
Your question is best answered by a recruitment specialist or employment agency who is able to advise on a rate that is best for you.
You can also use our calculator above this page to help give you an indication.
Cheers,
Shirley