Turning an hourly rate into real annual income
The mistake almost every new freelancer makes is multiplying their hourly rate by 2,080 — the hours in a standard full-time year — and assuming that is their salary. It is not. You do not bill 40 hours a week. A large slice of your time goes to finding work, answering email, sending invoices, and the dead air between projects. This converter uses the hours you actually bill, so the annual number it gives you is one you can plan around.
How the math works
The calculation is deliberately simple: your hourly rate, times your billable hours per week, times the number of weeks you work in a year. Drop the billable hours to a realistic 25 or 30 and the annual figure changes dramatically — which is the whole point. The monthly and weekly numbers are just that annual total divided down, and the day rate assumes a standard eight-hour day.
Remember this is gross, not take-home
Every figure here is before tax and expenses. As a freelancer you still owe self-employment tax and income tax on this income, and your software, hardware, and other costs come out of it too. To see what actually lands in your account, run the same gross figure through the take-home pay calculator.
Use it to sanity-check a salary offer
Comparing a freelance rate to a job offer? Flip it around. A $90,000 salary across 2,080 hours is about $43 an hour as an employee — but with benefits attached. To match that as a contractor you would need a meaningfully higher rate, since you now buy your own benefits and pay both halves of payroll tax. Our 1099 vs W-2 calculator does that comparison properly.