Calculating your hourly rate as a freelancer

The classic mistake

Many self-employed people think: "I want to earn CHF 8,000 a month, I work 40 hours a week, so my hourly rate is CHF 50." This calculation is wrong because it ignores three things: you're not billable 40 hours a week, you have business expenses, and you're not an employee — you have no paid vacation, no sick pay, no pension contributions paid by an employer.

The correct calculation

Start with your desired annual net income. Add: social security contributions (roughly 10%), health insurance, pension savings (3a), business expenses (office, equipment, software, insurance, vehicle), vacation and sick days (roughly 7 weeks that you're not billable), administration and acquisition time (roughly 20% of working time), and a profit margin for bad years and investments.

Realistic billable hours

A full-time self-employed person is generally billable for about 1,400–1,600 hours per year — not the 2,080 hours that a 40-hour week would suggest. The rest is administration, acquisition, continuing education, and time off. If you bill less than 1,200 hours per year, check your acquisition strategy.

Example calculation

Target net income: CHF 80,000. Plus social security: CHF 8,000. Plus business expenses: CHF 12,000. Plus pension (3a and daily allowance insurance): CHF 9,000. Total needed: roughly CHF 109,000. Divided by 1,500 billable hours = roughly CHF 73 per hour. This is your minimum — anything below this and you lose money. Add a 20% margin for security and investments: roughly CHF 87 per hour.