Freelance Rate Calculator
Setting the right freelance rate is one of the hardest parts of self-employment. Charge too little and you cannot cover taxes and business costs; charge too much and you lose clients. This calculator works backward from your target take-home income to find the hourly rate that actually gets you there after taxes and expenses.
How this calculator works
Gross Revenue Needed = (Desired Take-Home + Business Expenses) / (1 - Tax Rate). The tax rate for freelancers in the U.S. includes self-employment tax (15.3% on the first ~$160,000 of net self-employment income) plus federal and state income tax. Minimum Hourly Rate = Gross Revenue Needed / Total Billable Hours. Recommended Rate adds a buffer (typically 10-20%) for slow months, non-billable work, and scope creep.
Formula reference: IRS: Self-employment tax
Example
Example: $80,000 desired take-home, 30 billable hours/week × 48 weeks = 1,440 hours/year, $5,000 expenses, 30% combined tax rate, 15% buffer. Minimum rate: ~$59/hr. Recommended rate: ~$68/hr.
Frequently asked questions
- Why is my freelance rate so much higher than an equivalent employee salary?
- As a freelancer you pay both the employee and employer halves of Social Security and Medicare (15.3% total vs. 7.65% for an employee), you have no paid vacation or sick days, you cover your own health insurance, and you spend non-billable hours on business administration. These add up to 30-50% above equivalent employee compensation.
- Should I charge by the hour or by the project?
- Project-based pricing is usually more profitable once you are experienced, because faster delivery increases your effective hourly rate. Fixed-fee projects also give clients a predictable cost, which reduces friction in closing deals. Track your actual hours per project to refine future estimates.
This calculator provides estimates for general informational purposes only and does not constitute financial, tax, or legal advice. Always confirm important numbers with a qualified professional or your lender/institution before making a decision.