Career & Earnings

Freelance Rate Calculator

Set a defensible hourly rate that covers taxes, benefits, and downtime.

Every freelancer makes the same mistake in their first year: they take their old salary, divide by 2,080, and add 20% for "taxes and stuff." That number is catastrophically low. A salaried employee gets paid for every hour they are at their desk; a freelancer gets paid for roughly 50% of their working hours — the rest goes to sales, admin, scope creep, and unpaid revisions. This calculator reverse-engineers your target salary into an hourly rate that actually covers taxes, benefits, downtime, and overhead.

Your target lifestyle

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Your minimum hourly rate
$0 /hr

Enter your target salary and billable hours to see what you should charge.

Note: All calculations run in your browser. Nothing is sent to a server, stored, or tracked.

How this calculator works

The math, in plain English

The "divide salary by 2,080" method assumes you bill 40 hours per week, 52 weeks per year. No freelancer does. Real freelancers bill 20 to 30 hours per week — the rest goes to sales calls, scoping proposals, unpaid revisions, admin, and continuing education. And real freelancers take vacations, get sick, and have holidays.

The formula

Hourly rate = Gross revenue needed ÷ Annual billable hours

Where gross revenue needed = (Target take-home + Benefits + Overhead) ÷ (1 − tax rate). The tax rate adjustment is critical: if you want $80,000 take-home and your combined self-employment + income tax rate is 30%, you need to gross $114,286 to actually keep $80,000.

A worked example
Target $80,000 take-home, 25 billable hours/week, 5 weeks off, 30% tax, $3,000 overhead, $12,000 benefits. Gross revenue needed: ($80,000 + $12,000 + $3,000) ÷ 0.70 = $135,714. Billable hours/year: 25 × 47 = 1,175. Hourly rate: $115/hr — roughly 2.5× what the naive salary-divided-by-2,080 method would suggest ($44/hr).

Why benefits matter so much

A salaried employee earning $80,000 actually costs their employer $100,000+ when you include health insurance, retirement match, payroll taxes, paid leave, and equipment. As a freelancer, you absorb all of those costs. If your calculated rate feels high, remember: you are not charging more than an employee earns. You are charging the same total compensation, just routed through a different legal structure.

FAQ

Common questions

Why is the calculated rate so much higher than what I expected?
Because most freelancers severely underestimate their non-billable time and their benefits load. A $115/hr rate sounds high next to a $40/hr wage, but it produces the same take-home pay once you account for self-employment tax, unpaid admin time, and the benefits your old employer used to cover.
What if clients push back on my rate?
Three responses: (1) "This rate reflects a fully-loaded freelance cost — it is comparable to an employee earning $X." (2) Offer a retainer discount for guaranteed monthly hours. (3) Walk away. Clients who cannot afford your minimum rate are not your clients.
Should I charge by the hour or by the project?
By the project, almost always — but calculate the project price using your hourly rate as the floor. Project-based pricing rewards efficiency: if you finish faster, you earn more per hour. Hourly pricing punishes efficiency: faster work means less pay. The exception is genuinely open-ended work where scope is unknowable in advance.
How often should I raise my rate?
Annually, at minimum. Inflation alone justifies a 3-5% raise each year. If you are booking 80%+ of your available hours, raise rates 15-20% — you are leaving money on the table. If you are booking under 50%, your rate may be too high (or your sales process too weak).
What about taxes — is 30% realistic?
For a U.S. single filer earning $80,000-$150,000, 30% combined self-employment + federal + state income tax is a reasonable estimate. In high-tax states like California or New York, use 35-40%. In no-income-tax states like Texas or Florida, 25% may suffice. Always confirm with a CPA.
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Disclaimer: This calculator is provided for educational and informational purposes only. It does not constitute financial, tax, legal, medical, or professional advice. Results depend on the accuracy of the inputs you provide and the assumptions documented above. Always consult a qualified professional before making decisions based on these calculations.