Freelance Hourly Rate Calculator
Work backwards from the income you want: enter your target income, tax rate, business expense share and realistic billable hours to get the hourly rate you actually need to charge.
How to use the freelance hourly rate calculator
- Enter the take-home income you want for the year — what you want left after taxes.
- Set your effective tax rate; 25–35% is typical for self-employed workers once self-employment tax is included.
- Estimate business expenses (software, hardware, insurance, workspace) as a share of revenue.
- Be honest about billable hours: sales, admin and learning consume 30–50% of a normal work week.
Formula
About this calculator
The single most common freelance pricing mistake is copying a salaried hourly rate. A $50/hour salary is not a $50/hour freelance rate, because the freelancer pays both halves of payroll tax, buys their own benefits, and — crucially — cannot bill all 2,080 hours. Only 60–70% of a freelancer’s week is typically billable once you count finding clients, admin, and skill development.
This calculator works backwards from the income you want to keep. Each layer adds cost: taxes come off the top, business expenses come out of revenue, and the remainder must be earned inside a realistically small number of billable hours. The result is usually 30–60% higher than people expect — that gap is exactly why underpriced freelancers burn out.
Use the output as a floor, not a ceiling. Rate is also positioning: charging dramatically below market signals low quality to serious clients. Raising rates on new clients while grandfathering old ones is the standard path to closing the gap between your floor and your market.
Frequently asked questions
How many billable hours can I realistically get?
Most experienced freelancers sustain 20–28 billable hours per week. Assuming 40 billable hours weekly almost guarantees underpricing.
What tax rate should I plan for?
Self-employed workers pay income tax plus both halves of FICA (~15.3% up to the wage base). An effective rate of 25–35% is a sensible planning range depending on income and deductions.
Should I charge hourly or per project?
Hourly is simpler and safer while you learn your speed; project pricing rewards efficiency and scales better once you know your true hourly cost — which this calculator reveals.
How often should I raise my rate?
A common rhythm is a 5–10% increase annually or with each new client cohort, plus a larger reset whenever your pipeline is consistently full.