Pricing

Freelance Rate Calculator

Work backward from the income you want to take home to the minimum hourly rate that supports it. This tool accounts for the costs an employer used to cover — taxes, benefits, and the unpaid hours every freelancer has.

Target take-home income (per year)

Annual business expenses

Estimated total tax rate (SE + income)

Billable hrs/week

Weeks worked/year

Your minimum hourly rate

Gross revenue needed
Billable hours/year
Equivalent day rate (8h)

This is a floor — the least you can charge and still hit your goal after taxes, expenses, and the unpaid hours every freelancer has. Price above it based on your value.

This calculator gives a simplified estimate for educational purposes and uses approximate figures. It is not tax or financial advice and does not account for every rule, credit, or your full situation. Confirm specifics with a qualified professional. See our full disclaimer.

How the Freelance Rate Calculator works

The calculator flips the usual question on its head. Instead of asking "what rate sounds about right?", it starts from the income you actually want to keep and works backward to the hourly rate that supports it. It accounts for three things most freelancers underestimate: taxes, the benefits an employer used to provide, and the large share of your week that is simply not billable.

You enter your target take-home income, your annual business expenses, an estimated total tax rate, and how many hours you realistically bill each week. From there the math is straightforward: your take-home is grossed up for taxes, expenses are added back, and the total revenue you need is divided by your genuinely billable hours for the year.

Why billable hours change everything

A salaried employee is paid for roughly 2,080 hours a year. A freelancer is not. Proposals, invoicing, marketing, bookkeeping, learning new skills, and the quiet gaps between projects are all unpaid. Many full-time freelancers bill only 20 to 25 hours in a 40-hour week. If you divide your income goal by 2,080 hours, you will set a rate that quietly loses money on every project, because you are pretending unpaid hours are paid.

A quick worked example

Suppose you want to take home $70,000, you have $6,000 of business expenses, you estimate a 25% combined tax rate, and you can bill 25 hours a week across 48 weeks (1,200 billable hours). Your $70,000 take-home grosses up to roughly $93,300 of profit, plus $6,000 of expenses means you need about $99,300 in revenue. Divided by 1,200 billable hours, that is an hourly floor of around $83 — far above what most people guess, and exactly why so many freelancers feel busy but broke.

Treat the result as a floor, not a target

The number the calculator returns is the minimum rate that keeps you solvent. It is not a ceiling. Once you know your floor, you can price above it based on your experience, your niche, and the value you deliver to clients. Many experienced freelancers eventually move to project or value-based pricing — but even then, the hourly floor tells you whether a flat quote is actually profitable given the hours the work will take.

Frequently asked questions

Why is my freelance rate so much higher than my old salary?

Because as a freelancer you now cover costs your employer used to absorb: the full self-employment tax, your own health insurance and retirement, business expenses, and every unpaid hour of admin, marketing, and downtime. A rate equal to your old salary divided by 2,080 hours is effectively a steep pay cut.

How many billable hours should I assume in a year?

Far fewer than 40 a week. Time spent on proposals, invoicing, marketing, learning, and gaps between projects is unpaid. Many sustainable freelancers bill only 20–25 hours of a 40-hour week, which is why the calculator asks for billable hours separately from the hours you actually work.

Is the result the rate I should charge?

It is your floor — the minimum that keeps you solvent after taxes, expenses, and downtime. You should price above it based on your skill, niche, and the value you deliver. What you should never do is quote below it.

What tax rate should I enter?

Use a combined estimate of self-employment tax (around 15.3%) plus your income-tax bracket. Many freelancers use 25–30% as a working figure, but your real rate depends on your income and location.