Freelance Rate Calculator

Why freelancers underprice themselves

The usual method is to take a salary, divide by two thousand hours, and quote that. It produces a rate that is too low for three reasons at once. It assumes every working hour is billable, when sales, admin, invoicing and unpaid gaps between clients are not. It ignores the benefits a salary carried - provident fund, gratuity, paid leave, insurance. And it treats tax as somebody else's problem, when a freelancer pays their own.

This page inverts the calculation. You tell it what you want to keep after expenses and after tax; it solves for the gross receipts that produce that, and divides by the hours you can genuinely bill.

Billable hours are the number that moves the rate

Forty billable hours a week across all fifty-two weeks is 2,080 hours. Forty across forty weeks - allowing for leave and the gaps between contracts - is 1,600. The same target income over the smaller number needs a thirty per cent higher rate. This is where most of the underpricing happens, and it is entirely in the assumption rather than in the arithmetic.

• Billable hours, not hours worked - proposals and admin are overhead
• Working weeks after leave and after gaps between clients
• Business expenses added back, because they come out of what you bill
• Tax solved for rather than estimated, so the rate hits your target exactly

Section 44ADA, and the two thresholds it comes with

If your profession is one of the specified professions, Section 44ADA lets you declare fifty per cent of gross receipts as taxable income and treat the rest as deemed expenses without maintaining books. That is usually favourable, and it means your actual expenses are not separately deductible - the deemed half already stands in for them.

Two thresholds matter. The receipts ceiling for the scheme, which is higher where your cash receipts stay within five per cent of gross receipts, and the GST registration threshold for services. We flag both rather than computing past them silently, because crossing either changes your obligations rather than just your arithmetic.

From FY 2026-27 the scheme is section 58(2), Table Sl. 3 of the Income-tax Act, 2025, with the professions listed in section 62(4), on the same terms: 50% deemed profit and a ₹50,00,000 ceiling, or ₹75,00,000 where cash stays within 5%.

What it will not do

It will not decide whether you are eligible for 44ADA. That is a legal question about your profession, not one we can infer from a job title, so we publish the specified-professions list and let you answer it.

It also does not file anything, does not cover Section 44AD (section 58(2), Table Sl. 1 of the 2025 Act) for business rather than professional income, and does not tell you what the market will pay. The rate it returns is what you need to charge to reach your target - whether clients will pay it is a different question, and worth knowing separately.