I built a freelance rate calculator with Next.js

Here's the maths most calculators get wrong Most freelance rate calculators are wrong. Not buggy — conceptually wrong. They take your income goal, divide by hours, and hand you a number that will quietly lose you money all year. I got tired of explaining the correct calculation to freelancer friends, so I built a tool that does it properly. Here's the logic behind it, and a bit about how I built it. The flawed formula The typical calculator does this: hourly_rate = annual_income_goal / annual_hours_worked So if you want $80,000 and work 2,080 hours a year (40 × 52), it tells you to charge ~$38/hr. This is wrong in three separate ways. Fix 1: Tax is not optional Your income goal is a net number — what you want to keep. But you're taxed on gross. So the first correction is grossing up: const grossIncome = netTarget / ( 1 - taxRate ); // $80,000 / (1 - 0.28) = $111,111 That's already a $31,000 gap the naive formula ignores. Fix 2: You don't bill every hour you work This is the big one. Freelancers bill roughly 55–65% of their working hours. The rest is admin, proposals, invoicing, sales calls, and learning. const totalHours = weeksWorked * hoursPerWeek ; // 46 * 40 = 1840 const billableHours = totalHours * billableRatio ; // 1840 * 0.6 = 1104 So your real billable capacity isn't 2,080 hours. It's closer to 1,104. Pricing on the wrong denominator is how people end up working 50-hour weeks and still missing their income target. Fix 3: Business expenses come out of gross Software, hardware, insurance, courses — all real costs that need covering before you pay yourself: const totalNeeded = grossIncome + annualExpenses ; The corrected formula Putting it together: function minimumRate ({ netTarget , taxRate , expenses , weeks , hoursPerWeek , billableRatio }) { const gross = netTarget / ( 1 - taxRate ); const totalNeeded = gross + expenses ; const billableHours = weeks * hoursPerWeek * billableRatio ; return totalNeeded / billableHours ; } minimumRate ({ netTarget : 80000 ,