Freelance Rate Calculator
Most new freelancers price their work by dividing their old salary by 2,080 hours — and end up undercharging significantly, because that math ignores self-employment tax, lost benefits, and unbillable admin time. This calculator builds those costs into a realistic target rate.
Enter your target income to see your required rate.
How to use this calculator
- Enter the annual take-home income you want as a freelancer.
- Enter your realistic billable hours per week and working weeks per year.
- Set an overhead percentage to cover self-employment tax, insurance, retirement, and business costs a salaried job would normally include.
- Click "Calculate my rate" to see the hourly rate you need to charge.
Why it matters
New freelancers often price based on what a salaried job pays per hour — but freelancers cover their own taxes, health insurance, retirement, equipment, and unpaid admin time. This calculator builds that overhead into your target rate so you're not accidentally underpricing your work.
A worked example
Say you want $65,000 in annual take-home income, can realistically bill 25 hours a week, work 48 weeks a year, and build in a 30% overhead buffer. That works out to roughly $77 an hour. Compare that to the naive approach — dividing a former $65,000 salary by 2,080 hours — which suggests just $31.25/hour. The gap between $31 and $77 is exactly the tax, benefits, and unbillable time a salaried job was quietly absorbing all along.
Frequently asked questions
Why isn't my billable time 40 hours a week?
Freelancers spend real time on invoicing, proposals, marketing, and admin that clients don't pay for directly. Most freelancers can only bill 20-30 hours in a typical 40-hour week.
What should my overhead percentage be?
A common starting point is 25-35% to cover self-employment tax (~15.3%), health insurance, and retirement savings you'd otherwise get from an employer — adjust based on your actual costs.
Should I use this or the Self-Employment Tax calculator?
Use this one to set your rate before you start billing. Use the Self-Employment Tax calculator once you know your actual net income, to estimate what you'll owe.
What expenses should I include in my rate besides taxes?
Software subscriptions, equipment, professional insurance, marketing, and continuing education are common business costs freelancers fold into their overhead percentage or add as a separate line item.
Can I charge different rates for different clients?
Yes — many freelancers adjust for project complexity, tight deadlines, or client budget, as long as the rate never drops below the break-even number this calculator gives you.