Freelancer Hourly Rate Calculator
Calculate the minimum hourly rate you must charge as a freelancer to hit your take-home income goal after tax, business expenses, health insurance, and retirement.
What you want to keep, after tax + expenses
Hours actually invoiced — not hours worked
52 minus vacation, holidays, unbillable weeks
Software, equipment, accounting, etc. — NOT health insurance
The biggest self-employment cost most freelancers underestimate
SE ~15% + federal ~12% + state ~3–10% = 30–37% typical
SEP-IRA / Solo 401(k) contribution goal
Used to show your floor project rate alongside the hourly
Your minimum hourly rate
Charge at least
$119/hr
For a 40-hour project, that's a floor of $4,762 · 1,200 billable hours/year to hit your target
Annual revenue needed
$142,857
Gross billings before tax / expenses
Effective rate (40h/wk W-2 equivalent)
$74/hr
What a W-2 hourly rate would need to match
Project rate (40 hrs)
$4,762
Floor price for a typical-size project
Where each dollar of revenue goes
Billable ≠ worked. Most freelancers work 40+ hours but only invoice 20–30 of them. Marketing, admin, learning, prospecting and downtime between gigs all eat into billable hours. If you charge based on a 40-hour week, you'll likely fall short.
This is a floor, not a ceiling. The rate above is what you need to hit your take-home goal. If your skills, niche, or client outcomes justify more, charge more. The point of this calculator is to stop you from charging less — which is the much more common freelancer mistake.
How to use this calculator
- Enter your target annual take-home — what you want in your bank account after tax and expenses.
- Enter your billable hours per week — actually invoiced hours, not hours worked. Most full-time freelancers bill 20-30 hours/week, not 40.
- Enter your billable weeks per year — 52 minus vacation, holidays, downtime. 45-48 is realistic for most full-timers.
- Enter annual business expenses — software, equipment, insurance, accounting, professional development.
- Enter your combined tax rate — federal + state + SE tax. 30% is a common rough estimate.
- Enter your annual retirement target — SEP-IRA or Solo 401(k) contribution goal.
The calculator returns your minimum hourly rate and shows where each dollar of revenue goes (take-home, taxes, expenses, retirement).
How it works
The math works backwards from your take-home goal:
Required gross revenue = (take-home + expenses + retirement) ÷ (1 − tax rate)
Hourly rate = required gross revenue ÷ (billable weeks × billable hours/week)
For a freelancer targeting $75,000 take-home, with $6,000 of expenses, $10,000 retirement, 30% tax rate, 25 billable hours/week, 48 weeks/year:
- Required gross: ($75,000 + $6,000 + $10,000) ÷ 0.70 = $130,000
- Billable hours: 25 × 48 = 1,200
- Hourly rate: $130,000 ÷ 1,200 = $108/hour
That $108 is the floor. To make that target take-home, you can’t charge less. If $108 feels high vs. the market, the options are: lower your take-home goal, reduce expenses or retirement, increase billable hours, or find higher-paying clients.
Most freelancers undercharge because they reason from “what do similar jobs pay?” instead of “what do my targets require?” — and end up running short on tax payments, retirement, or take-home year after year.
Frequently Asked Questions
How do I figure out how many billable hours per year I'll actually have? ▾
Start with the calendar — 52 weeks × 40 hours = 2,080 hours/year if you were 100% billable. Then subtract: 2-4 weeks vacation, 10 holidays, sick days, downtime between gigs, marketing time, admin time, learning time. Most full-time freelancers end up billing 1,000-1,500 hours/year — about half of paid employment. The biggest pricing mistake is assuming a 40-hour billable week.
What tax rate should I use? ▾
A rough starting point is 30% — that's 15.3% self-employment tax + roughly 12% federal income tax at the median bracket + 3% state. If you live in a high-tax state (California, New York), bump it to 35%. Below the standard deduction or in a no-income-tax state, 25% may be enough. The point is to not under-budget — running short at tax time is the most common freelancer cash-flow disaster.
Should I include retirement savings in my hourly rate? ▾
Yes — and most freelancers don't. As a W-2 employee, a 401k contribution comes out of your paycheck before you see it; the rest is take-home. As a freelancer, your retirement comes from your gross billings, so it has to be priced in upfront. A $10,000/year SEP-IRA goal on 1,200 billable hours adds about $8.33 to your hourly rate.
What's a reasonable hourly rate for a freelancer? ▾
It depends entirely on your skills, niche, and clients. Junior copywriters: $30-$60/hr. Mid-level developers: $75-$150/hr. Senior consultants in finance, law, or specialised tech: $200-$500/hr+. But the more useful question is: 'what rate covers my take-home goal + benefits + tax + retirement?' If the rate that covers your needs is above what the market pays, you have a market-fit problem; below, you're underpricing.
Should my rate be higher than a salaried equivalent? ▾
Significantly higher — typically 50-100% higher than the equivalent W-2 hourly wage. A $50/hr W-2 employee (≈$100k salary) gets benefits, employer-paid FICA, PTO, sick days, and predictable income. A freelancer charging $50/hr to do similar work ends up making far less in true take-home. The 1099 vs W-2 Calculator shows exactly how much premium you need.
How often should I re-calculate my rate? ▾
Annually, at minimum — when tax law changes, when your goals change, when your billable hours change. Also any time you raise prices: re-run the math to know what each rate hike actually delivers to your bottom line. Most freelancers under-raise (5%/year when 10-15% is justified) because they don't have a clear sense of the number they're targeting.