Freelance hourly rate – target gross salary in a limited company
Calculate the hourly rate a Swedish limited company needs to invoice to fund your target gross salary, pension and overhead.
Method
Fund twelve monthly salaries, payroll contributions, pension premiums including 24.26% special payroll tax, and annual overhead excluding recoverable VAT. Required revenue is cost divided by one minus the revenue margin, then divided by annual billable hours. Enter hours after holidays, sickness, sales and administration.
Worked example
A SEK 40,000 gross salary, 31.42% employer contribution, 5% pension and SEK 50,000 overhead cost SEK 710,638.40 a year. With a 10% margin and 1,000 billable hours, the rate is about SEK 790/hour excluding VAT. 20% fewer hours require a 25% higher rate.
Limitations
Only a limited company paying a gross salary. This is not a sole-trader, dividend, umbrella-company or take-home-pay model. Adjust payroll rates for your age and relief eligibility. Margin is before corporation tax. VAT is not revenue. Holiday-pay supplements must fit within salary or overhead budgets.
Official sources
Annual revenue requirement divided by twelve; actual monthly invoices can vary.