Freelance Hourly Rate Calculator
The rate you must charge to hit your income goal
Going freelance or raising your rates? Enter your take-home goal, business costs, tax rate and realistic billable hours to find the rate that actually gets you there. Most freelancers price by halving a salary, and the two mistakes below explain why that lands roughly 40% short.
Why your rate must be higher than you think
Every freelance rate calculator is answering the same question: what should i charge freelance, given what I need to live on. The instinct is to take the salary you want, divide by 2,080 hours, and quote that. It is wrong twice over, and the errors compound.
- You do not bill 40 hours a week. Sales calls, proposals, invoicing, bookkeeping, marketing, admin and dead time between contracts are all unpaid. 20 to 30 billable hours of a 40-hour week is realistic, and most people overestimate their own figure.
- You pay both halves of payroll tax. An employer covers 7.65% of FICA invisibly; self-employed you pay the full 15.3% on top of income tax. Nothing withholds it for you, so it has to be inside your rate.
This is why a self employed hourly rate calculator has to start from take-home pay rather than from a salary figure. Add unpaid holiday, no sick pay, no employer pension contribution and your own health insurance, and the gap between a salary and the equivalent freelance rate is far wider than it looks.
What the tax field does to your rate
Same target throughout: $80,000 take-home, $10,000 of expenses, 25 billable hours a week, 48 weeks — 1,200 billable hours a year.
| Tax rate | Revenue to bill | Set aside for tax | Hourly rate | Day rate (8 hrs) |
|---|---|---|---|---|
| 0% (ignoring tax) | $90,000 | — | $75.00 | $600.00 |
| 25% | $116,667 | $26,667 | $97.22 | $777.78 |
| 30% | $124,286 | $34,286 | $103.57 | $828.57 |
| 35% | $133,077 | $43,077 | $110.90 | $887.18 |
The first row is the mistake almost everyone makes. Quoting $75 an hour to take home $80,000 leaves you $28.57 an hour short at a 30% rate — you would be undercharging by 38% and would discover it at tax time. Note also that the tax is grossed up, not simply added: to keep $80,000 after 30% you need $114,286 of profit, not $104,000.
Billable hours are the biggest lever
Same $80,000 target and 30% tax, changing only how many hours you can actually bill:
| Billable hours/week | Hours/year | Required rate | Reality |
|---|---|---|---|
| 15 | 720 | $172.62 | Part-time or heavy sales load |
| 20 | 960 | $129.46 | Common for newer freelancers |
| 25 | 1,200 | $103.57 | A realistic full-time target |
| 30 | 1,440 | $86.31 | Good utilisation, established |
| 35 | 1,680 | $73.98 | Rare outside agency subcontracting |
| 40 | 1,920 | $64.73 | Not achievable while also running the business |
This table is the argument for tracking your hours honestly for a month before setting a rate. Assuming 40 billable hours when you actually manage 25 means quoting $64.73 for work that needs $103.57 — you would end the year at roughly 60% of your income goal while working flat out.
What counts as a business expense
The expenses field should cover everything the business costs you before you pay yourself. Freelancers routinely underestimate it:
- Health insurance if you buy your own. Often the single largest line, easily $6,000 to $12,000 a year.
- Software and subscriptions, which accumulate quietly.
- Hardware, amortised across its useful life.
- Accounting, legal and liability insurance.
- Retirement contributions if you want them to sit outside your take-home figure.
- Coworking, phone, internet and the business share of home costs.
- Professional development, conferences and training.
- Bad debt. Some invoices are paid late and a few are never paid at all.
For the tax rate itself, self-employment tax is a flat 14.13% of profit up to the wage cap, and income tax sits on top of that. A combined 25 to 35% is a sensible planning range for most people; the self-employment tax calculator gives a specific figure for your profit.
Freelance rate versus an equivalent salary
A common shorthand is that a freelance rate should be roughly double the hourly equivalent of the salary you would accept. That sounds aggressive until you break it down: about 35% goes to non-billable time, 25 to 35% to tax, and the rest to benefits an employer would have provided.
Our example bears it out. A $103.57 rate looks like a $215,000 salary at 2,080 hours, but it delivers $80,000 of take-home with no paid leave, no employer pension and no sick pay. Compare offers the other way round: run the salary through the salary calculator, then check what rate would actually match it here.
Pricing mistakes that keep freelancers underpaid
- Forgetting tax entirely. The single most expensive error, worth about 38% of your rate.
- Assuming 40 billable hours. Overstates capacity by roughly 60%.
- Pricing against other freelancers rather than against your own cost base. Their circumstances are not yours.
- Never raising rates with existing clients. Inflation alone erodes a fixed rate every year.
- Discounting for "exposure" or promised future work. The future work rarely arrives at a better rate.
- Quoting hourly for work you are fast at. Efficiency should not cut your income; consider project or value pricing.
- Ignoring scope creep. Unbilled revisions quietly cut your effective rate.
Estimate only — not tax or financial advice. Tax rates vary by income, state and structure.
How this freelance hourly rate calculator works out its numbers
The rate is derived backwards from take-home pay: required profit = take-home ÷ (1 − tax rate), then rate = (required profit + expenses) ÷ billable hours.
- Tax is grossed up, not added. Adding 30% to $80,000 gives $104,000, which still leaves you short after tax; dividing by 0.70 gives the $114,286 you actually need. This distinction is the point of the field.
- Tax applies to profit, not revenue, so expenses are added after the gross-up. That matches how self-employment and income tax actually work.
- Billable hours are hours per week × working weeks, defaulting to 25 × 48 = 1,200. This is deliberately below a 2,080-hour year because non-billable work is real.
- Leave the tax field blank or at 0 and you get the original pre-tax rate, which is useful only for comparison.
- Not modelled: progressive tax brackets, the deductible half of self-employment tax, the QBI deduction, state tax, and retirement contributions unless you include them as expenses. Use a single blended effective rate.
Reviewed September 2026.
Figures reviewed . Every worked example on this page is checked against the calculator above.
Freelance Hourly Rate Calculator: frequently asked questions
How do I figure out my freelance rate?
Work backwards. Take your target take-home income, gross it up for tax, add business expenses, then divide by realistic annual billable hours. For $80,000 take-home with $10,000 of expenses at a 30% tax rate and 1,200 billable hours, that is $103.57 an hour.
How many hours can a freelancer bill?
Usually 20 to 30 of a 40-hour week. The rest goes to sales, proposals, invoicing, admin, marketing and gaps between contracts. Track your own for a month before setting a rate, because most people overestimate.
What should I charge as a freelancer?
Whatever covers your take-home goal, tax and expenses across the hours you can genuinely bill. There is no universal figure: the same $80,000 target needs $64.73 an hour at 40 billable hours and $172.62 at 15.
Do I need to add tax to my freelance rate?
Yes, and you must gross up rather than simply add. To keep $80,000 after 30% tax you need $114,286 of profit, not $104,000. Skipping tax entirely undercharges you by around 38%.
How do I calculate a freelance day rate?
Multiply your hourly rate by the billable hours in a day, usually 8. A $103.57 hourly rate is an $828.57 day rate. Bear in mind a booked day rarely yields 8 billable hours once calls and admin are counted.
Should my freelance rate be double a salaried hourly rate?
Roughly, yes. About 35% of your time is non-billable, 25 to 35% of profit goes to tax, and you fund your own health insurance, pension, holiday and sick pay. Doubling is a reasonable starting point rather than a greedy one.
What expenses should I include?
Everything the business costs before you pay yourself: health insurance, software, hardware, accounting, insurance, coworking, phone and internet, professional development, and an allowance for invoices that are paid late or never.