Accountants Freelance Rate Calculator
Estimate the hourly and daily freelance rate an accountant may need to charge to meet income goals, cover business costs and allow for tax.
Overview
This Accountants Freelance Rate Calculator estimates a practical hourly and daily charge-out rate from your desired annual income, business costs, estimated tax reserve, billable availability and contingency buffer.
How it works
The calculator first combines your target personal income and annual business costs. It then increases the revenue requirement to allow for the percentage you plan to reserve for tax and contributions, and applies your contingency allowance. Finally, it divides the required annual revenue by your expected billable days and billable hours. This helps avoid setting a rate based on all working time rather than the smaller amount of time that can actually be invoiced.
How to use this calculator
- 1Enter the annual personal income you want your freelance work to provide.
- 2Add your expected annual business costs.
- 3Choose a percentage to reserve for tax and applicable contributions.
- 4Estimate the number of days and hours you can realistically bill clients each year.
- 5Add a contingency allowance and review the suggested hourly and daily rates.
Example Calculation
Target annual personal income
$60,000
Annual business costs
$12,000
Tax and contribution reserve
25%
Billable days per year
180
Billable hours per day
7
Contingency allowance
10%
Recommended hourly rate
$83.81
With these assumptions, required annual revenue is about 105600, suggesting a rate of about 84 per hour or 587 per day.
Frequently asked questions
How do I calculate my freelance accounting hourly rate?
Estimate the annual revenue needed for your income, business costs, tax reserve and buffer, then divide it by the client-billable hours you expect to work.
What counts as a billable day for a freelance accountant?
A billable day is a day on which you expect to invoice client work. It normally excludes holidays, sick days, administration, marketing, training and business development.
Why should I include a tax reserve in my freelance rate?
Freelancers commonly need to set aside part of their revenue for tax and applicable contributions. Including a reserve helps ensure your quoted rate reflects that cash requirement.
Should I use an hourly rate or a daily rate?
Use the format that fits the engagement and client expectations. A daily rate can suit project or interim work, while an hourly rate can suit shorter, variable or ad hoc assignments.
How much contingency should a freelancer include?
The appropriate allowance depends on the stability of your client pipeline, payment terms and business risks. A contingency can help cover unplanned costs, delayed payments and periods without billable work.
Does this rate include VAT or sales tax?
No. The calculator estimates the underlying fee required for your business plan. Any indirect tax charged to clients should generally be considered separately where applicable.
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Assumptions and warnings
Assumptions
- The tax and contribution reserve is applied as a percentage of total invoiced revenue.
- Business costs are entered as annual amounts and are separate from your desired personal income.
- Billable days and hours exclude non-billable work such as marketing, administration, leave and training.
- The result is a planning estimate and does not account for all individual tax, contractual or commercial circumstances.
- The contingency allowance is added after calculating the revenue needed for income, costs and reserves.
Warnings
- This calculator provides a general business planning estimate only and is not financial or tax advice.
- Tax obligations, allowable expenses and contribution rules vary by location and individual circumstances.
- Check that your final rate also reflects your experience, service scope, client value, market conditions and contract terms.