About the Freelance Rate Calculator
This freelance rate calculator works backwards from the income you want to take home to the rate you need to charge. Enter your target after-tax income, your yearly business expenses, a realistic estimate of billable hours per week, the weeks you will not work, and your combined tax rate. It returns your minimum hourly rate, a day rate and a weekly rate, plus the gross revenue you need to bill.
It is built for freelancers, consultants, contractors and agency owners setting or raising prices. A common mistake is dividing a salary by 2,080 hours: in reality a good share of your time goes to sales, admin and learning, and you pay for your own time off, equipment, software, insurance and self-employment tax. This tool builds those costs in.
Business expenses are treated as deductible, so tax applies only to your profit. The tax rate should cover income tax plus any self-employment or social contributions in your country; many US freelancers plan on a combined 25–35%, since self-employment tax alone is about 14.1% of net profit. The result is a floor — price by value and market rates where you can.
With the default inputs, the minimum hourly rate is $106.15. Change any value above to recalculate instantly.
How to use the freelance rate calculator
- 1Enter the income you want to keep after tax.
- 2Add up your yearly business costs, including insurance and software.
- 3Estimate billable hours per week honestly — 20 to 30 is typical.
- 4Enter weeks off for holidays, sickness and quiet periods.
- 5Set your combined tax rate and read your minimum hourly and day rates.
Formula and method
First the target take-home income I is grossed up for tax: I ÷ (1 − t) is the profit you must earn so that after paying tax at rate t you keep I. Business expenses E are added on top; because expenses are deductible they are not grossed up for tax.
That yearly revenue is divided by your billable hours: working weeks (52 minus weeks off) times billable hours per week. The day rate multiplies the hourly rate by the hours in a billed day, and the weekly rate by your billable hours per week.
- I
- Target take-home income after tax
- E
- Yearly business expenses
- t
- Combined tax rate on profit
- w
- Weeks off per year
- h
- Billable hours per week
Worked examples
$100,000 take-home, 30 billable hours a week
Keeping $100,000 after 30% tax needs $142,857 of profit; adding $10,000 of expenses means billing $152,857. Spread over 48 weeks × 30 hours = 1,440 hours, that is $106.15 an hour or about $849 a day.
Part-time freelancer
$60,000 ÷ 0.75 = $80,000 of profit, plus $6,000 of expenses = $86,000 of revenue. With 44 working weeks at 25 hours (1,100 hours), the minimum rate is $78.18 an hour.
Senior consultant with higher costs
Grossing $150,000 up at 35% tax gives $230,769 of profit; $24,000 of expenses makes $254,769 of revenue. Across 46 weeks × 32 hours that is $173.08 an hour, or about $1,298 for a 7.5-hour day.
Frequently asked questions
How do I calculate my freelance hourly rate?+
Add your target income (grossed up for tax) to your yearly business expenses, then divide by the hours you can realistically bill in a year. Billable hours are usually far fewer than the hours you work, because sales, admin and learning are unpaid.
How many billable hours should a freelancer plan for?+
Many full-time freelancers bill 20–30 hours a week on average once marketing, admin, invoicing and gaps between clients are counted. Planning on 40 billable hours every week usually leads to underpricing.
Why should freelancers charge more than employees earn?+
Freelancers pay for their own time off, health cover, retirement, equipment and software, and in the US pay both halves of Social Security and Medicare through self-employment tax. That is why a sustainable freelance rate is usually well above the hourly pay of an employee with the same take-home income.
Should I charge hourly, daily or per project?+
Use this hourly rate as your floor, then quote whatever structure clients prefer. Project and value-based pricing can earn more than hourly when you work efficiently, but estimate the hours behind every quote so you never go below your minimum.
What tax rate should I use?+
Use your expected average rate on business profit, including income tax and self-employment or social contributions. In the US, self-employment tax is 15.3% on 92.35% of net earnings (the 12.4% Social Security part stops at the annual wage base), so a combined 25–35% is a common planning figure.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.