Setting your hourly rate as a freelancer: how to get it right

Written by Ilias Aarrass7 min read · Published on 18 August 2026 · Last reviewed on 11 September 2026

In short

Calculate your rate by converting desired net income into profit, adding your business costs and dividing by your billable hours: 22 to 28 a week.

In the worked example, € 3,200 net a month across 1,150 billable hours yields a € 54 hourly rate, excluding VAT.
KVK counts 1,840 working hours a year for a five-day week, of which a starter can bill 50 to 60 per cent.
Acquisition, administration, travel and training take 30 to 40 per cent of your time and are therefore built into your rate.
Raise your rate at least yearly in line with inflation, starting with new clients who do not know your old rate.

One of the hardest questions for starters: what do I charge per hour? Many freelancers look at their old gross salary and add a bit on top. That almost always goes wrong, because as an entrepreneur you have to pay for far more yourself than you think. This article explains how to calculate a rate you can actually live on.

Why isn't your old salary a good starting point?

As an employee, your employer paid for your holidays, sick days, insurance and employer's contributions. As a freelancer all of that comes out of your own rate. On top of that, far from all your hours are billable: acquisition, admin, travel time and writing quotes earn you nothing. Someone working forty hours often invoices only twenty-five to thirty.

How do you work from net income to a rate?

Start with what you need net per month to live on. Add your business costs: insurance such as disability cover, software, phone, transport, your buffer and your bookkeeper. Then add the income tax and the healthcare act contribution you pay on your profit. Divide that annual amount by your billable hours, allowing for holidays and a few sick days. Only then do you have your minimum hourly rate. For most freelancers it quickly turns out considerably higher than they expected. Calculate with your after-tax profit rather than your turnover; the difference is explained in turnover, profit and income.

What is the market doing?

Your calculation is the floor; the market sets the ceiling. Look at what comparable freelancers in your field and region charge. Specialisation pays off: the more specific your expertise, the less comparable you are and the more room you have. And remember that too low a rate doesn't just cost money, it also sends a signal about your quality.

When do you raise your rate?

At least once a year, if only in line with inflation. The easiest moment is with new clients: they don't know your old rate. With existing clients, announce an increase well in advance with a short, businesslike explanation. Almost nobody walks away over a reasonable increase.

What's sensible to do?

Do the calculation properly once, with your real costs and your real billable hours, and repeat it every year. We regularly work through these sums with starters, and the outcome is nearly always an eye-opener. Unsure about your numbers? Run them past us.

Working back from what you want to keep

Most freelancers pick a rate by looking at peers. Working back from your desired net income is more honest, because your costs and billable hours differ from anyone else's.

Worked example: wanting € 3,200 net a month

Required profit (net divided by ± 0.73): around € 52,600 a year
Plus business costs and reservations (insurance, buffer, equipment): € 9,000
Billable hours: 46 weeks x 25 hours: 1,150 hours

Result: Required turnover of € 61,600 divided by 1,150 hours gives a € 54 hourly rate, excluding VAT. Working below it means structurally missing your goal

Frequently asked questions

How do I calculate my minimum hourly rate?

Convert desired net income to profit (divide by roughly 0.73 at middle incomes), add business costs and divide by genuinely billable hours. That is your floor, excluding VAT.

How many billable hours are realistic?

Full-time, some 22 to 28 hours a week across 45 to 47 working weeks. The rest goes to acquisition, administration, travel and training.

Do I add VAT to my rate?

To business clients you quote excluding VAT; they offset it anyway. To consumers you communicate including VAT, since for them it is a real cost.

My competitors are cheaper. Should I drop my rate?

Not below your calculated floor: then you are subsidising clients. Look instead at specialisation, speed or fixed project prices; competing on price rarely holds for a one-person business.

When do I raise my rate?

At least yearly with inflation, and further once your diary is structurally full: that is the market signal you are too cheap. New clients first, existing ones with proper notice.

Is a fixed project price better than an hourly rate?

For well-defined work, often yes: you are rewarded for speed and the client knows where they stand. Do fence off additional work in writing, or your margin leaks away.

Sources

How to calculate your hourly rateKVK · kvk.nl
Rates and tax credits 2026Belastingdienst · belastingdienst.nl

Sources checked on 11 September 2026

This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.