Freelancer Rate Calculator
Calculate the hourly rate you need to charge as a freelancer to hit your income goal.
โน๏ธAbout This Calculator
Most new freelancers take their old $80,000 salary, divide by 2,000 hours, and charge $40/hour. Then they're broke by March. Here's why: you now pay 15.3% self-employment tax ($12,240), your own health insurance ($6,000+), software and equipment ($3,000), and โ here's the kicker โ only about 60% of your working hours are actually billable. The rest is proposals, invoicing, chasing payments, and marketing yourself. That $40/hour needs to be $84/hour just to match your old salary. This calculator works backwards from your desired take-home income and tells you the minimum rate that actually makes freelancing viable.
Frequently Asked Questions
How do I find my minimum rate?
Take your target income ($80,000), add self-employment tax (~$12,240), add expenses (~$8,000), and divide by your annual billable hours. If you bill 25 hours/week for 48 weeks, that's 1,200 hours. $100,240 รท 1,200 = $83.53/hour minimum. Go below that and you're literally paying to work. Most freelancers who "can't make it work" are charging $40-50 when they need $75+.
Why is the number so much higher than my old salary divided by hours?
As an employee, your company paid half your Social Security/Medicare (7.65%), gave you health insurance worth $6,000-15,000/year, paid you during sick days and holidays, and 100% of your time was "billable." As a freelancer, you cover all of that yourself AND spend 30-50% of work hours on unpaid admin, marketing, and proposals. The real multiplier from salary to freelance rate is typically 1.5-2x.
What percentage of my time is billable?
Track it for a month โ most freelancers are shocked. New freelancers: 40-50% billable. Established with steady clients: 60-70%. The rest is proposals (that go nowhere), invoicing, bookkeeping, emails, client calls you don't charge for, marketing, content creation, and the 3-hour research rabbit hole that was only supposed to take 30 minutes.
How do I handle taxes as a freelancer?
Set aside 25-30% of every payment in a separate bank account. Don't touch it. Pay estimated quarterly taxes to the IRS (April 15, June 15, September 15, January 15) or face penalties. Self-employment tax is 15.3% of net income. You can deduct half of it from income tax, plus deduct home office, equipment, software, health insurance premiums, and mileage. Get a CPA โ it pays for itself.
Hourly or project pricing?
Start hourly to learn how long things actually take. Then switch to project pricing as soon as possible. Why: if you get faster with experience (you will), hourly rate punishes you for being good. A logo that took you 20 hours as a beginner and 5 hours now should not pay 75% less. Project pricing rewards expertise. Just make sure to clearly define scope โ open-ended projects at a fixed price is a recipe for disaster.
How do I raise my rates without losing clients?
New clients get the new rate immediately โ most won't even flinch. For existing clients: give 30-60 days notice, keep increases to 15-20%, and frame it around the value you deliver. "Based on the results we've achieved together, my rate for continued work will be $X starting [date]." Some will leave. That's fine โ the ones who stay are your best clients, and you'll fill the gap at your new rate faster than you think.
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For informational purposes only. Calculator results are estimates based on the inputs you provide. This is not financial, investment, tax, or legal advice. Consult a qualified financial professional before making major financial decisions.