How to calculate your freelance rate
A salaried employee's hourly pay is a poor guide for freelancers. You pay your own self-employment tax, cover your own tools and insurance, take unpaid time off, and spend hours each week on admin, sales and invoicing that nobody pays for. This calculator works backward from the income you want to keep.
Billable hours = Billable hours per week × (52 − Weeks off)
Hourly rate = Revenue needed ÷ Billable hours
Example
To take home $80,000 at a 25% effective tax rate with $10,000 in expenses, you need about $116,667 in revenue. Billing 30 hours a week for 48 weeks (1,440 hours) means charging at least $81.02 per hour.
Tips
- Be realistic about billable hours. Many freelancers bill only 50–70% of the hours they work.
- Treat the result as a floor. Price higher based on value, demand and experience.
- Revisit your rate every year as expenses and taxes change.
FAQs
What tax rate should I use?
US freelancers pay 15.3% self-employment tax on most net earnings plus income tax. A combined 25–35% is a reasonable planning number for many people. Ask a tax professional for your situation.
Why use billable hours instead of total hours?
Only billable hours generate revenue. Admin, marketing and learning time still has to be paid for out of your billable rate.
Should I charge hourly or per project?
Hourly is simplest when scope is unclear. Once you can estimate well, project pricing based on this rate often earns more.