Your hourly rate must cover your target net income, tax, fixed costs and non-billable hours. The formula below is a practical starting point — not a substitute for tax advice.
Formula
Target net income + tax + fixed costs + holiday = revenue goal. Divide that by your billable hours per year.
Example
Aiming for €40,000 net, assuming ~30% tax, €5,000 fixed costs and 1,400 billable hours? That gives a minimum of roughly €73 per hour (excl. VAT).
Don't forget
Include pension, disability insurance (AOV), sick leave, sales and admin time (10–20% of your hours). Quote your rate excl. VAT (BTW); VAT is added separately on the invoice.
Market check
Compare your rate with peers via LinkedIn, industry bodies and platforms — and adjust for experience, niche and client type.
What to include in your costs
Besides your desired income, count business costs: insurance, pension and disability cover, hardware and software, any workspace and your accountant. Without them your rate looks higher than it really yields.
Why billable hours matter more than working hours
You spend many hours you can't invoice: quotes, admin, acquisition and training. If you calculate with 40 hours a week instead of the hours you actually bill, you end up too low.
Test your rate against the market
A rate that comes out of your calculation must also fit the market. Compare with peers in your field and experience level. If your minimum rate is higher than what clients pay, look at costs, specialisation or another pricing model such as a fixed project price.
Frequently asked questions
Should I raise my rate every year?
It is wise to review your rate regularly, for instance yearly, and to account for inflation and your growing experience. Announce an increase to existing clients in good time.
Do I calculate my rate including or excluding VAT?
Always excluding VAT. VAT is added on top on the invoice and passed on to the Tax Authority, so it isn't income.
Is a fixed project price better than an hourly rate?
It depends on the assignment. An hourly rate is fair when scope is uncertain; a fixed price rewards efficiency but needs a clearly defined scope.
What is a realistic number of billable hours?
It differs per profession and year. Many freelancers end up lower than expected. Calculate with your own figures from last year and use the rate calculator as a starting point.