Why most freelancers undercharge
If you want €3,000 net per month, you can't simply divide it by 160 hours and charge €18.75/hour. In reality, you need to cover taxes, business expenses, vacation, sick days and non-billable time. A realistic hourly rate is usually €45–55 – more than double the naive calculation.
Billable percentage is the key
Realistically, only 50–70% of your working time is billable. The rest goes to admin, sales, marketing, proposals, emails and self-development. This is the single biggest factor freelancers forget when pricing. Our calculator accounts for this automatically.
Taxes eat more than you think
Tax rates vary significantly by country. In Finland, a freelancer's total tax burden is typically 25–35%, in Germany up to 30–42%, while in Spain and Estonia it can be as low as 15–20%. Remember that taxes include income tax, social security contributions and potential pension payments.
When to raise your rate
Raise your rate annually by at least the rate of inflation (2–3%). As you gain experience, specialise and demand grows, the increase should be larger. An experienced freelancer should not charge the same as a beginner – the value of your expertise grows every year.
Next steps
Planning to go freelance? Check out our startup cost calculator and compare the best accounting software for entrepreneurs.