1. Choose your working weeks
Start with 52 weeks, then subtract planned holidays, breaks, illness, or other periods when you do not expect to work. For example, 48 working weeks allows four weeks away from work.
2. Estimate weekly working hours
Use the number of hours you actually expect to work, not necessarily a standard full-time schedule. If you work 40 hours a week for 48 weeks, your total working time is 1,920 hours.
3. Estimate your billable percentage
Now estimate what share of those hours will be client-billable. If 60% is realistically billable, the calculation is 1,920 × 0.60 = 1,152 billable hours.
Worked example
Suppose you work 48 weeks per year, 40 hours per week, and expect 60% of your time to be billable:
48 × 40 × 60% = 1,152 billable hours per year.
The remaining 768 hours can cover sales, administration, marketing, planning, communication, professional development, and other non-billable work.
How billable hours affect your freelance rate
If your business needs $72,000 of annual revenue and you expect 1,152 billable hours, a simple starting benchmark is $72,000 ÷ 1,152 = $62.50 per billable hour. This is a planning calculation; taxes, expenses, business structure, market conditions, and other pricing considerations can change the rate you choose.
Common mistakes
- Assuming every working hour is billable.
- Forgetting holidays and time off.
- Ignoring unpaid sales and proposal work.
- Counting project communication and revisions as zero-time activities.
- Never comparing the estimate with your actual tracked hours.
Review the number regularly
After a few months, compare estimated billable hours with your actual client hours. If your utilization is consistently lower, update the percentage rather than relying on an optimistic assumption.
Use the calculator
Enter your working weeks, weekly hours, and expected billable percentage to get an annual estimate.
Open the Billable Hours Calculator →