How to Set a Freelance Hourly Rate in Australia
A practical minimum hourly-rate estimate is (annual pay goal + annual business costs) ÷ realistic annual billable hours. Add a buffer only if you choose to account for profit or uncertainty. Use the result as a planning starting point, then compare it with your market and offer.
Start with the annual revenue target
First decide what amount you want the business to make available for owner pay, then list the business costs the rate must help cover. The calculator uses (owner-pay goal + annual business costs) ÷ annual billable hours, with an optional buffer applied to the revenue target.
Example: an $80,000 pre-personal-tax owner-pay goal plus $20,000 annual costs, divided by 1,000 billable hours, gives a simple $100 per billable hour before any optional buffer.
Estimate billable hours realistically
Billable hours are the hours you can actually invoice to clients. Your working week also includes quoting, administration, marketing, bookkeeping, training, leave and gaps between projects. Enter billable hours and billable weeks—not total calendar working time—in the freelance hourly rate calculator.
If your availability changes by season or workload, test a lower-hours scenario too. Fewer billable hours raise the hourly rate needed to reach the same annual target.
Treat the result as a floor to investigate
This estimate is not a recommended market rate. Compare it with your service scope, experience, customer value, competitors and demand. The Australian Government’s pricing strategy guidance recommends considering costs and customer value rather than setting price from cost alone.
The calculator does not calculate personal tax, determine superannuation obligations, decide whether GST applies, or allow for every risk. A contractor’s legal and tax treatment depends on the arrangement; see the ATO’s employee and contractor guidance.
Try the related calculator
Use the Freelance hourly rate calculator to apply the formula to your own figures. Results are estimates using the assumptions shown on the tool page.
Frequently asked questions
How do I calculate a freelance hourly rate?
Add the annual owner-pay amount you want to plan for and the annual costs the business needs to cover, then divide by realistic annual billable hours. Any buffer is a separate planning choice.
Does this hourly rate include tax or GST?
No. The calculator labels its owner-pay goal before personal tax and displays the suggested rate before GST. Check your own tax and GST obligations separately.
Why should I use billable hours instead of a 40-hour week?
A freelancer cannot usually invoice every working hour. Admin, sales, leave and other non-client tasks reduce the time available to bill.
Is the result the rate I should charge clients?
It is a cost-and-time-based estimate, not a market recommendation. Consider your service value, scope, experience and customer demand before choosing a price.