Just how do you set your freelance rates?
But just how do you translate that into an actual figure?
Here’s one option. If you run a freelance, service based business the number of billable hours available to you plays a big role.
And to help you translate those number of hours into a billable rate, Jo (our resident techy), has developed this rather nifty tool. So if you know how much you want to earn each year, and what your expenses are (along with a number of other variables), this Hub calculator will give you an idea of how much you need to be charging / earning per hour.
It’s fab and well worth a try…
Before you dash off and start entering your data, please note there is a BUT. This calculator is not an accountancy tool. Instead it’s intended as a guide and we’d always recommend you seek professional help if you’re unsure.
How to Use The Calculator
Enter your costs and desired income per annum, in as much detail as you can.
Anything with an * is a required field (except your email address – this is only required if you want to be emailed your results). Everything else is optional so leave blank anything that doesn’t apply.
Assumptions This Calculator Uses
- You are self employed and not a director of a limited company.
- You have a personal tax allowance of £8,105.
- You will be paying tax at 20% on income between £8,105 – £42,475.
- You will be paying tax at 40% on income between £42,475 – £158,105.
- You will be paying tax at 50% on income over £158,105.
- You are paying Class 2 National Insurance at £137.80pa.
- You will be paying Class 4 National Insurance at 9% on income between £7,605 and £42,475 and at 2% on anything over £42,475.
- If you are not VAT registered enter costs inclusive of VAT.
- If you are VAT registered enter values net of VAT and then add VAT to the calculated billable rate.
Please note this is not an accountancy tool but uses a gross estimate of general expected tax and national insurance payments. The tool is a general estimator of values, and it does have limitations. For full details of your tax and national insurance liabilities along with specific financial questions and any cash flow implications, please ask your accountant as this calculator does not allow for the various inclusions, exceptions and specifics.
Big thanks to:
- David Waltham for figuring out the net to gross calculations.
- Rosie Slosek and Giuseppe Colombi for advising on the content.
Today’s Micro Action
Simple. Try the calculator for yourself 🙂