Freelance Hourly Rate Calculator

How much to charge per hour to actually make a profit

Most freelancers underprice because they forget expenses, taxes, and unbillable hours. You enter your desired monthly net income, business expenses, workdays, and work hours. Then, set two sliders for your billable time percentage and your tax and Bituach Leumi (National Insurance) deduction. The result is your minimum hourly rate before VAT, rounded up, along with a price for a 20-hour project. With the default 15,000 NIS net and 2,500 NIS expenses, the rate is 238 NIS per hour. This is a planning estimate, and your actual tax rate depends on your tax brackets and personal circumstances.

Frequently asked questions

Why is the result higher than I expected?

Because only part of your hours are billable to a client. The rest goes to marketing, bookkeeping, and sales, and your hourly rate must cover those too.

How is the rate calculated?

The desired net income is divided by the percentage left after tax, expenses are added, and the total is divided by your monthly billable hours. For example, 21 days times 8 hours times 60 percent equals about 101 billable hours.

Does the price include VAT?

No. This is the price before VAT. An Osek Murshe (VAT-registered business) adds VAT to the invoice, while an Osek Patur (Israel's VAT-exempt sole trader status) charges it exactly as is.

What billable hours percentage should I choose?

The default is 60 percent, which is a reasonable starting point for most freelancers. The slider ranges from 30 to 90 percent. Those who spend a lot of time on marketing and sales meetings should go lower, while someone working with a single steady client can go higher.

How much should I set aside for tax and Bituach Leumi?

The default is 30 percent, and the slider ranges from 15 to 50. The real rate depends on your income, tax brackets, and tax credits, so you should check with your accountant and update it.

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