Calculating your hourly rate as a freelancer: what's really behind the number

Many freelancers set their hourly rate too low — not from ignorance, but because the standard calculation is too simple. Dividing your desired monthly income by working hours leaves out the most significant costs of self-employment.

The most common mistake: using an employment salary as a benchmark

An employee taking home €3,000 net per month costs their employer considerably more — employer social contributions, paid leave, sick pay and pension contributions are already built in. As a freelancer, you carry all of that yourself. If you target €3,000 net and price your time like an employee prices their salary, you'll find significantly less left over at year end than you planned.

What actually comes off your revenue

Before setting your rate, you need to account for four cost blocks:

Taxes — income tax under §32a EStG, progressive from 0% to 45%. On a profit of €54,000 (€60,000 revenue minus €6,000 business expenses), that's around €7,941 per year — after deducting health insurance contributions from taxable income.

Health and long-term care insurance — as a voluntary statutory insured freelancer, you pay around 17.5% of your income in 2026 on a minimum assessment base of €1,318.33/month. Add long-term care insurance of 4.2% (childless). This adds up to €700-900/month quickly.

Business expenses — software, tax advisor, professional liability insurance, training, office, hardware. Even working from home, realistic costs are €400-800/month.

Non-billable time — business development, proposals, bookkeeping, illness. From 365 days, after weekends, public holidays, vacation and admin, you realistically have 160-200 billable days left.

The right formula

Instead of calculating top-down, calculate bottom-up:

1. Decide your target net income per month
2. Work up to the required annual revenue accounting for all deductions
3. Divide that revenue by your realistic billable days
4. Divide the day rate by your actual working hours per day

That's exactly what Freiberechner does — working backwards from your target net income to the required hourly rate, using the real 2026 tax and social insurance formulas.

What do freelancers charge in Germany?

Market rates vary significantly by sector and experience. IT freelancers commonly charge €80-150/hour, UX and product designers €70-120/hour, copywriters and journalists €60-100/hour, management consultants from €100/hour upwards. These are market benchmarks, not recommendations. Use the calculator to find your minimum hourly rate — then sense-check it against the market.

The bottom line

A rate that only reflects your desired net income isn't a real rate — it's an underestimate. When you factor in all costs and calculate with realistic billable days, you typically land 30-50% higher than your initial instinct. That's not a problem — it's the reality of freelance life in Germany.