Freelance Rate Calculator

Find the exact hourly rate you need to charge to match your target salary - after self-employment tax, health insurance, vacation, and business expenses.

$
The annual net income you want to end up with
Hours per week you actually bill (not total working hours)
%
Standard US rate is 15.3%
$
$
401k match, dental, vision, PTO value, etc.
$
Software, equipment, coworking, professional fees
USD - self-employment tax defaults use US FICA rates (15.3%)
Minimum Hourly Rate
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Break-even rate
Recommended Rate
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Minimum + 20% buffer
Required Monthly Revenue
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To hit your target
Billable Hours / Year
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Working weeks x hrs/week

Cost Breakdown (Annual)

    Disclaimer: These results are estimates for informational and educational purposes only. They do not constitute financial, tax, or business advice. Tax rates and actual business costs vary. Consult a CPA or tax professional. Full disclaimer ->
    Downloads a PDF summary to your device

    How to use this freelance rate result

    This calculator helps translate an employee salary target into a freelance hourly rate. The result should be treated as a minimum planning number, not an automatic quote. Real client pricing also depends on specialization, demand, project risk, and the value of the outcome.

    Formula and assumptions

    The estimate starts with target salary, then accounts for business expenses, benefits, taxes, unpaid time off, and realistic billable hours. Freelancers usually cannot bill every working hour because sales, proposals, admin, bookkeeping, and learning time are part of the job.

    Example

    If a freelancer wants to replace a $75,000 salary, has $12,000 in annual expenses, and can bill 1,150 hours per year, the rate needs to be much higher than a simple salary divided by 2,080 hours. That gap is normal because the freelancer carries costs an employer normally absorbs.

    Common mistakes

    • Using 40 billable hours per week when only 20 to 30 are realistic.
    • Forgetting self-employment tax and benefits.
    • Setting a rate with no buffer for slow months or scope changes.

    How to interpret your result

    The recommended rate is a planning floor. If the number is higher than expected, it usually means one of three things: the target income is high for the current billable hours, expenses are heavy, or the business needs more utilization. Lowering the rate without changing those inputs only moves the problem into cash flow.

    What to test next

    Change billable hours, annual expenses, and target salary one at a time. This shows which lever matters most. Many freelancers discover that improving utilization by five billable hours per week can matter as much as raising the headline hourly rate.

    Read freelance rate vs salary for the reasoning behind the calculation.

    Frequently Asked Questions

    Why does my freelance rate need to be so much higher than my salary?
    As a freelancer, you pay both the employee and employer portions of Social Security and Medicare taxes (15.3% combined). You also pay for your own health insurance, receive no paid vacation, and must cover all business expenses. An employer normally covers these on top of your salary - as a freelancer, your rate has to.
    What is self-employment tax?
    Self-employment tax is 15.3% of net self-employment income - 12.4% for Social Security and 2.9% for Medicare. As a W2 employee, your employer pays half (7.65%). As a freelancer, you pay both halves, though you can deduct half of SE tax on your federal income tax return.
    Should I add a buffer to my minimum rate?
    Yes. The recommended rate adds a 20% buffer above the minimum. This covers periods of low utilization (not every week is fully booked), client negotiations, scope creep, and the value of your expertise. Many experienced freelancers charge 30-50% above their true minimum, especially once they have demand.
    How many billable hours should I realistically plan for?
    A full-time employee works ~2,080 hours/year. As a freelancer, subtract vacation time, then expect 20-30% of remaining time to be non-billable (admin, sales, networking, learning). Many freelancers effectively bill 1,000-1,400 hours per year. Enter your realistic billable hours per week above - 25-30 is a solid estimate for most freelancers. Once you know your rate, use our Coast FIRE calculator to see how self-employment income can fast-track early retirement.

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