Freelance Rate Calculator

Start with your desired annual income, add your business expenses, then divide by your billable hours per year. Next, gross up for taxes (self-employment + income tax) and add a profit buffer. This calculator walks through each step to give you a fully-loaded minimum rate.

Billable hours are the hours you can actually charge clients for. Out of a 40-hour work week, freelancers typically bill 50-75% of their time; the rest goes to admin, marketing, client communication, professional development, and unbillable project phases. If you work 50 weeks a year and bill 30 hours per week, that's 1,500 billable hours.

Self-employed workers in the US pay 15.3% self-employment tax on net income plus federal and state income tax. A safe rule of thumb is to set aside 25-35% of gross income for taxes, depending on your income level and state. This calculator estimates your tax burden and factors it into the required rate.

A $100,000 W2 salary comes with paid vacation, health insurance (employer covers 70-80%), payroll tax (employer covers 7.65%), and other benefits worth $15,000-30,000/year. As a freelancer you pay all these yourself, plus self-employment tax. The full-cost equivalent of a $100,000 salary for a business is often $130,000-150,000.

Hourly is simpler to calculate but exposes you to scope creep and penalizes efficiency. Project-based pricing aligns incentives: clients know costs upfront and your income grows as you get faster. Many experienced freelancers use project pricing with a built-in buffer and track internal hourly rates to ensure profitability.