Freelance Rate Calculator

A freelance hourly rate that only matches your old salary divided by 2,080 hours is a pay cut. Freelancers pay both halves of payroll tax, fund their own benefits and time off, and spend a large share of the week on unbillable work — finding clients, invoicing, admin. The rate has to carry all of that.

The true-rate formula

Hourly rate = (target take-home + business expenses + taxes + benefits) ÷ billable hours per year. Billable hours are the key input: 52 weeks minus holidays and sick days, times the hours a week you can actually invoice, which for most freelancers is 20–25 out of a 40-hour week. Taxes include self-employment tax on top of income tax, so a target of $70,000 take-home often requires close to $100,000 in gross billing once expenses and benefits are added.

When to use this calculator

Use it before quoting your first client, and again every January when expenses, health insurance and tax brackets change. It is also the honest way to evaluate a retainer or a day rate: divide the offer by the hours it will really consume, including meetings and revisions, and compare against your true rate rather than your gut. If the market in your field cannot support the number, the calculator shows which lever to pull — more billable hours, lower expenses, or a smaller take-home target.

Worked example

Target take-home $65,000; expenses (software, laptop, coworking, insurance) $9,000; estimated taxes $18,000; retirement and health contributions $8,000. That is $100,000 to bill. With 46 working weeks and 22 billable hours a week, you have 1,012 billable hours, so the rate is about $99 an hour. The same freelancer billing 30 hours a week could charge $73; at 15 billable hours the rate needed jumps to $145.