A good hourly rate is more than an amount that ‘sounds nice’. As a self-employed person, you want to work profitably, cover your costs and have enough left over for taxes, holidays and pension. In this article you will discover step by step how to calculate your ideal hourly rate for 2026 with current figures, examples and a handy template to get started right away.
Why a profitable hourly rate is crucial
Many self-employed people determine their rates based on feeling or by looking at competitors. That seems practical, but it can lead to structurally charging too little. A profitable hourly rate takes into account all your business costs, taxes and days off. This way you not only work hard, but also smart. With an income that matches your goals.
Tax rates and costs in 2026
To calculate a realistic rate, you need to know what the net amount remains after tax. Similar rates are expected to apply for 2026 as in 2025. These are the proposed rates for 2026 (Income tax):
- Band 1: With an income up to € 38,883: 35.70%.
- Band 2: With an income between € 38,883 and € 79,137: 37.56%.
- Band 3: With an income higher than € 79,137: 49.50%.
The self-employed person’s deduction drops to €1,200 (2025: €2,470), which reduces the tax benefits.
In addition, as an entrepreneur you pay the health insurance contribution (ZVW) of approx 4.85% on your profit up to the maximum basis (approximately €79,000 in 2026). Don’t forget your fixed costs: insurance, software, marketing, training and pension contributions.
Example: what does one hour of work really cost?
Suppose you want to keep €60,000 net and have 1,200 billable hours annually. Your business costs are €10,000 per year.
- Total earnings = €60,000 (net) + €10,000 (costs) + taxes (~40%) ≈ €116,000
- Hourly rate = €116,000 ÷ 1,200 hours = €96.70 per hour (ex VAT if you are a VAT-registered entrepreneur)
With this amount you can pay all your costs, pay taxes and still achieve your desired income. Do you work part-time or have fewer billable hours? Then your hourly rate increases.
Common mistakes when determining your rate
The most common mistake is that entrepreneurs overestimate their billable hours. Of the 1,600 hours worked per year, you can often only actually invoice 1,000 to 1,200. The rest is spent on administration, acquisition and training.
Other pitfalls:
- Forgetting insurance and pension reserves
- Do not include a buffer for unforeseen costs
- Hourly rate not revised annually in case of rising costs or inflation
Step-by-step plan: calculate your profitable hourly rate
Follow these steps to calculate a solid rate for 2026:
- Calculate your annual costs: office, insurance, laptop, telephone, training, etc.
- Determine your desired net income: what do you want to earn privately?
- Add tax and ZVW to this: count on approximately 40% tax burden.
- Calculate your billable hours: average 1,000–1,200 per year.
- Divide the total amount by the number of hours: that is your gross hourly rate.
Use the ‘Determine hourly rate as a self-employed person’ template to quickly see what the minimum amount you should charge.
Checklist: profitable hourly rate in 2026
- Have you included all your business costs?
- Do you charge tax and ZVW?
- Is your rate high enough for vacation, illness and pension?
- Are you using the latest figures for 2026?
- Do you work with a reliable calculation tool?
Get started with your rate
Do you want to be sure that you don’t forget anything? Use the ‘Determine hourly rate as a self-employed person’ template to calculate your ideal rate. This tool takes into account all costs, taxes and reservations so you can do business with confidence. Or order the Starter Bundle if you are just starting out: it contains everything you need for a financially healthy start.
#determine #profitable #hourly #rate #Happy #Financial