Minimum Viable Rate
Freelance hourly must cover salary + benefits + overhead ÷ effective billable hours.
MVR = (salary + benefits + overhead) ÷ (weeks × hours/week × utilization %).
Most freelancers charge what feels "reasonable" and are shocked when they end up making less than a W-2 equivalent. The math is not a feeling — it is four inputs and a division.
Part of: Saving & Spending Calculators
Quick answer
MVR = (salary + benefits + overhead) ÷ (weeks × hours/week × utilization %).
Key points
- ▸ Annual need = salary + benefits + business overhead. All three are real, all three must be recovered in billable hours.
- ▸ Effective billable hours = weeks × hours/week × utilization. Utilization captures non-billable time: admin, sales, sick days, interviews.
- ▸ Typical utilization: 50% for new freelancers, 60% steady-state, 70%+ for well-pipelined veterans.
- ▸ Benefits value: $15–25k/yr for a mid-career professional (health, retirement match, PTO, equipment).
- ▸ Overhead: tools, accounting, coworking, training. $5–15k/yr typical.
Examples
- Mid-career target$120k salary + $18k benefits + $9k overhead, 47 weeks × 40 hrs × 60% = 1,128 eff hrs → MVR $130/hr.
- New freelancerSame targets, 50% utilization → 940 eff hrs → MVR $156/hr. Low utilization forces the rate up.
- Senior consultant$180k + $25k + $15k, 45 × 35 × 70% = 1,103 hrs → MVR $199/hr. Sell the specialization.
When to use which tool
- Minimum Viable RateMain tool — all seven inputs including utilization and living-wage comparison.The absolute minimum hourly rate to match a corporate salary after self-employment tax, benefits, and non-billable time.
- The LeapFor deciding when freelance income can replace salary.The exact date a side-hustle can sustainably replace a primary salary, factoring self-employment tax and benefits loss.
- The Value FloorOnce you have an MVR, it becomes your personal Value Floor for outsource decisions.Is your time worth more than the professional quote? Balance-scale verdict with DIY cost vs outsourcing.
Related
- Minimum Viable RateThe absolute minimum hourly rate to match a corporate salary after self-employment tax, benefits, and non-billable time.
- The LeapThe exact date a side-hustle can sustainably replace a primary salary, factoring self-employment tax and benefits loss.
- The Value FloorIs your time worth more than the professional quote? Balance-scale verdict with DIY cost vs outsourcing.
- Revenue per HeadEstimate whether the next hire raises or lowers revenue per employee after management time and ramp-up.
Frequently asked questions
› Should I price at MVR? Trust & accuracy
MVR is the floor, not the price. Price to value when you can — charge MVR as the absolute "walk away below this" number.
› How do I raise utilization? How-to
Retainer clients, longer engagements, and saying no to tire-kickers. Sales and admin shrink as a percentage once you have steady demand.
› How should I use this guide with a Kefiw tool? How-to
Use the guide as the plan and the linked Kefiw tool as the check. Read the steps first, try the move manually, then use the tool to compare outputs, catch edge cases, and decide whether the result actually fits your task.
› What mistake do tool guides help avoid? Troubleshooting
Tool guides help avoid using a utility mechanically without understanding what you are trying to accomplish. Most word, writing, and text utilities are fast, but speed can hide context mistakes. Know whether you are solving a puzzle, cleaning copy, drafting a line, or checking a rule.
› Can a tool guide help me learn the skill? How-to
A tool guide can help you learn if you pause before accepting the output and ask why it worked. Compare your first guess with the tool result, look for the rule or pattern, and repeat that review. Passive copying solves one task; active review builds the skill.