An employee with €3,000 net costs the employer €5,000. A freelancer who wants the same net needs an hourly rate of around €80 because only half their time can be billed. The calculation step by step.
In short
- Billable hours: of 2,000 working hours, around 1,000 to 1,200 remain after holidays, illness, sales and admin.
- Costs: health insurance €800 to €1,000, pension 20 percent, business costs, reserves, taxes.
- Example: €3,000 net needs around €95,000 of revenue, that is €80 to €95 per billable hour.
- Negotiating: day rates instead of hourly rates, fixed fees for defined results, annual adjustment.
Step one: the hours
A year has 52 weeks times 40 hours, 2,080 hours. Minus 30 days of holiday, 10 public holidays, 10 sick days, so 50 days or 400 hours, leaves 1,680. Of that 30 to 40 percent go to sales, quotes, bookkeeping, training, idle time and unpaid rework. That leaves 1,000 to 1,200 billable hours. Whoever assumes 1,500 has never worked a year self-employed.
Step two: the need
Private: €3,000 net a month, €36,000 a year. Health insurance: voluntarily in the statutory scheme by income, in 2026 between €250 and €1,150 a month including care, for an income around €60,000 around €900, so €10,800 a year; private similar, dearer in old age. Retirement provision: at least 20 percent of net need because no employer contributes, €8,000. Disability and liability €2,000. Reserve for dry spells and investment €4,000. Business costs: office, software, hardware, travel, tax adviser, insurance, training €8,000 to €12,000. Together around €72,000 before tax.
Step three: the tax
Income tax falls on profit after business costs. At around €62,000 of profit, income tax and solidarity surcharge in 2026 come to about €15,000; traders pay trade tax on top, largely creditable, freelancers none. To have €72,000 available after tax you need around €87,000 of profit plus €10,000 of business costs, so €97,000 of net revenue excluding VAT.
Step four: the rate
€97,000 divided by 1,100 hours gives €88 an hour, at 1,000 hours €97. That is the rate for the employee equivalent of €3,000 net, without a surcharge for entrepreneurial risk. Whoever charges €50 earns around €1,700 net at full utilisation and saves nothing for old age. The hourly rate calculator does this with your figures, backwards too: what is left at your current rate?
The market
The market does not pay your costs but your value. IT freelancers charge €100 to €120 in 2026 on average, consultants €120 to €250, designers €70 to €110, copywriters €60 to €100, tradesmen €60 to €90, coaches €100 to €200. If your cost rate sits above the market rate you must cut costs, raise hours or move to another segment. If it sits below, you charge the market rate, not your cost rate.
Negotiating and adjusting
Day rates bundle and look smaller per unit. Fixed fees for defined results separate price from time and reward experience. Discounts only for volume or advance payment. Raise annually by inflation plus two to three percent, with three months’ notice for existing clients. The first job at an introductory price is fine if the contract says it is one.
Try it yourself
Hourly Rate CalculatorTarget net income, costs, holidays, billable hours: the hourly rate that actually suffices.Income Tax CalculatorEnter taxable income, read off tax, marginal rate and average rate, with joint assessment.Frequently asked questions
Do I have to add VAT?
From €25,000 of previous-year revenue yes, 19 percent on the invoice, which you remit and business clients reclaim. Small businesses below that may waive it but lose the input tax deduction.
How much should I set aside for tax?
30 to 35 percent of every receipt to a tax account, 40 at higher incomes. The tax office sets advance payments after the first assessment.
Hourly or fixed fee?
Hourly for unclear tasks, fixed fee with a change clause for defined results. Experienced freelancers move towards fixed fees because they get faster.
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