Freelancer Rate Calculator
Find the minimum hourly rate you need to cover taxes, benefits, and reach your income goal.
Income & Expenses
Work Schedule & Taxes
Your Minimum Hourly Rate
$139/hr
$1,112/day · $12,710/mo
Revenue Needed
$152,525
Billable Hours
1,104/yr
W-2 Equivalent
$96,320
Revenue Breakdown
Reality Check
Your effective hourly rate (across all work hours, not just billable) is $43/hr. This is what you actually earn per hour worked. A W-2 employee earning the same take-home would need a salary of about $96,320.
Disclaimer
- Rates are minimums — charge more for specialized skills and experience.
- Billable percentage of 60% is typical; adjust based on your admin/marketing time.
- Consider value-based pricing for projects rather than strict hourly billing.
Why Freelancers Need to Charge More Than Employees
A common mistake new freelancers make is pricing their hourly rate at the same level as their former W-2 hourly wage. This ignores the 15.3% self-employment tax, health insurance costs, lack of paid time off, unbillable admin hours, and business expenses. A $50/hour employee needs to charge at least $75-100/hour as a freelancer to maintain the same take-home pay.
The Freelancer Cost Stack
Here is what eats into a freelancer's gross revenue before it becomes take-home income:
| Cost Category | Typical Range | Annual Impact |
|---|---|---|
| Self-employment tax (15.3%) | Fixed by law | $12,240 on $80K |
| Federal income tax | 10-37% | $10,000-$20,000+ |
| Health insurance | $400-$800/mo | $4,800-$9,600 |
| Retirement (SEP IRA / Solo 401k) | 10-25% | $8,000-$23,000 |
| Business expenses | Varies | $2,000-$10,000 |
| Unbillable time (30-40%) | Admin, marketing, learning | Lost revenue |
Billable Hours: The Hidden Factor
A full-time employee works about 2,080 hours per year. A freelancer billing 60% of work hours (the industry average) only bills about 1,248 hours. After vacation and sick days, the number drops further. Your rate must account for all working hours — not just billable ones. This is why the "effective hourly rate" shown in our calculator is the number that truly represents your earnings.
Value-Based vs Hourly Pricing
The calculator gives you a floor — the minimum rate to cover costs and hit your income target. Many successful freelancers charge well above this minimum by using value-based pricing: charging based on the value delivered to the client, not hours spent. A $5,000 website that generates $50,000/year in sales for a client is worth far more than 50 hours at $100.
IRS — Self-Employed Tax Center→Frequently Asked Questions
What is a good freelance hourly rate?
It depends on your field and experience. Software developers typically charge $75-200/hour, graphic designers $50-150/hour, writers $40-100/hour, and consultants $100-300/hour. Use this calculator to find your personal floor, then research market rates for your specialty.
How do I convert my salary to a freelance rate?
A rough rule: take your desired salary, add 30-50% for taxes and benefits, then divide by your estimated billable hours (typically 1,000-1,400/year). For example, a $80K salary target becomes $104K-$120K in needed revenue, divided by 1,200 billable hours = $87-$100/hour.
Should I charge more for rush jobs?
Yes — rush fees of 25-50% above your standard rate are industry standard. Rush work often displaces other billable work or requires overtime. Communicate rush pricing upfront in your contract or scope of work.
Compare your freelance income to an employee equivalent with our Self-Employment Tax Calculator or explore entity options with the Business Entity Comparator.