Freelance Rate Calculator
Calculate your ideal freelance hourly rate based on your desired annual income, expenses, billable hours, and self-employment taxes.
Your Freelance Rate
How to Use This Tool
- Enter your desired annual take-home income in the Desired Annual Income field.
- Enter your annual business expenses (software, equipment, insurance, etc.) in the Annual Business Expenses field.
- Enter your estimated combined income and self-employment tax rate in the Estimated Tax Rate field.
- Enter how many hours per week you expect to actually bill clients in the Billable Hours per Week field.
- Enter how many weeks per year you plan to take off in the Weeks Off per Year field.
- Enter a profit margin percentage to build in savings, retirement, and business growth.
- Review your minimum hourly rate along with the full revenue breakdown and total billable hours per year.
Formula & How It Works
Total Billable Hours
Total Billable Hours = Billable Hours per Week × (52 − Weeks Off per Year)Only the weeks you actually work count toward your billable hour total for the year.
Tax Amount
Tax Amount = (Desired Income + Annual Expenses) × Tax Rate%Taxes are calculated on top of both your desired income and your business expenses, since both must be covered by revenue you bill out.
Profit Amount
Profit Amount = (Desired Income + Expenses + Taxes) × Profit Margin%The profit margin is applied after taxes are added, so it covers a cushion on top of your full pre-profit cost base.
Total Revenue Needed
Total Revenue = Desired Income + Expenses + Taxes + ProfitThis is the total amount you need to bill clients in a year to hit your income goal after expenses, taxes, and profit.
Minimum Hourly Rate
Hourly Rate = Total Revenue ÷ Total Billable HoursDividing total required revenue by your realistic billable hours gives the minimum rate you need to charge per hour.
Practical Examples & Common Use Cases
Example: $80,000 target, 25 billable hrs/week
Desired income $80,000 + expenses $10,000 = $90,000 subtotal. Tax at 30% = $27,000. Before profit: $117,000. Profit at 10% = $11,700. Total revenue needed = $128,700. Billable hours = 25 × (52 − 4) = 1,200 hrs/year. Hourly rate = $128,700 ÷ 1,200 = $107.25/hr.
Example: $50,000 target, lean expenses
Desired income $50,000 + expenses $4,000 = $54,000. Tax at 25% = $13,500. Before profit: $67,500. Profit at 5% = $3,375. Total revenue = $70,875. Billable hours = 20 × (52 − 2) = 1,000 hrs/year. Hourly rate = $70,875 ÷ 1,000 = $70.88/hr.
Example: $120,000 target, high billable hours
Desired income $120,000 + expenses $15,000 = $135,000. Tax at 32% = $43,200. Before profit: $178,200. Profit at 15% = $26,730. Total revenue = $204,930. Billable hours = 30 × (52 − 6) = 1,380 hrs/year. Hourly rate = $204,930 ÷ 1,380 = $148.50/hr.
Frequently Asked Questions
Most freelancers bill 20-30 hours per week out of a 40-hour work week. The remaining time goes to proposals, invoicing, marketing, emails, and administrative tasks. Start with 25 hours as a realistic estimate.
US freelancers typically face a combined rate of 25-35%, which includes self-employment tax (15.3%) plus federal and state income taxes. A 30% estimate works for most situations, but consult a tax professional for your specific case.
Many freelancers have different rates for different services. Use this calculator as a baseline minimum rate, then adjust upward for specialized or high-value work.
A freelance rate of $75/hour is roughly equivalent to a $100,000 salary when you account for self-employment taxes, health insurance, retirement, paid time off, and other benefits an employer would cover.
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