How the rate is worked out
The calculator starts from the money you want to keep and adds back everything that comes out of your fees before it reaches you. Then it divides by the hours you can actually bill.
- Profit before income tax = take-home income / (1 - average tax rate). Income tax is charged on profit, so to keep a given amount you need to earn more than it.
- Revenue needed = profit before income tax + business expenses + social security contributions. In Greece both expenses and EFKA contributions are deducted before income tax is worked out, so they are added on top here.
- Billable hours = billable hours per week x working weeks per year.
- Hourly rate = revenue needed / billable hours. The calculator also rounds it up to the next 5 and shows the price with VAT, which is what a client pays when VAT applies.
Worked example
Eleni is a freelance designer in Athens. She wants €30,000.00 a year to live on, spends €3,000.00 on her business, pays about €3,000.00 a year to EFKA and expects an average income tax rate of 22%. She plans 25 billable hours a week for 46 weeks.
| Profit before income tax | €30,000.00 / (1 - 0.22) = €38,461.54 |
|---|---|
| Revenue needed | €38,461.54 + €3,000.00 + €3,000.00 = €44,461.54 |
| Billable hours | 25 x 46 = 1,150 hours |
| Hourly rate | €44,461.54 / 1,150 = €38.66, so she quotes €40.00 |
| With 24% VAT | €47.94 an hour on a Greek client's invoice |
Why billable hours are lower than working hours
A 40-hour week is not 40 billable hours. Finding clients, writing proposals, invoicing, bookkeeping, learning and gaps between projects all take time nobody pays for. Many freelancers bill 20 to 30 hours in a full week. Working weeks are lower than 52 too: holidays, public holidays and sick days come out of the year, and 44 to 47 weeks is a realistic range.
The simplest way to know your own numbers is to track every working hour for a month, billable or not, and see the split.
Checks before you quote
- Compare with the market. The calculator gives the rate you need, not the rate a client will accept. If the two are far apart, look at your costs, your hours or your positioning.
- VAT is not yours. If you are VAT registered, quote business clients the rate before VAT and add VAT on the invoice. For a client in another EU country the reverse charge usually applies and no VAT is added.
- Withholding is not a discount. When a Greek business client withholds 20% income tax, that amount counts towards your own tax bill. It does not lower the rate you need.
- Review it yearly. Contributions, tax and costs change; so should your rate.
These are estimates to help you set a price, not tax advice. Your accountant can give you your real average tax rate and contribution category.
Questions
What hourly rate should a freelancer charge?
At least the rate that covers the income you want, your costs, your social contributions and income tax, spread over the hours you can really bill. The calculator works that out; compare it with what clients in your field pay.
Should my hourly rate include VAT?
Quote business clients your rate before VAT and add VAT on the invoice when you charge it. The calculator shows the rate with VAT so you know what the client pays.
Are my numbers saved?
No. The calculation runs in your browser. Nothing is sent to TrackLode or stored, and closing the tab clears it.
Related
- Free invoice generator for freelancers - Fill in your details and lines, pick the VAT wording, then print the invoice or save it as a PDF. Everything happens in your browser: no account, and nothing is sent to us.
- EU VAT for freelancers: which wording goes on your invoice - Which VAT treatment and legend a freelancer needs on an invoice, by customer type.
- From timesheet to invoice - Turn tracked hours into a clear invoice, step by step, without retyping anything.
- All invoicing and VAT guides for freelancers