Freelance Hourly Rate Calculator
Calculate minimum freelance hourly rate from desired income, expenses, self-employment tax, and billable hours.
Covers costs and meets your income target.
Freelance hourly rate must cover more than just your desired salary. Unlike employees, freelancers pay their own taxes, cover business expenses, and do not bill for every hour they work. This calculator determines the minimum hourly rate needed to hit your income goals.
Formula:
Gross Revenue Needed = (Desired Income + Business Expenses) / (1 - Tax Rate)
Hourly Rate = Gross Revenue Needed / (Billable Hours per Week × Working Weeks per Year)
What each variable means:
- Desired Annual Income — your target take-home pay after taxes and expenses.
- Annual Business Expenses — all costs of running your freelance business: software, insurance, equipment, office or coworking space, website hosting, and professional development.
- Tax Rate — your combined federal, state, and self-employment tax rate. In the US, self-employment tax alone is 15.3%.
- Billable Hours per Week — how many hours you can actually bill clients. Freelancers typically bill only 60–70% of their total working time, since the rest goes to admin, marketing, invoicing, and finding new clients.
- Working Weeks per Year — total weeks you plan to work. Remember to subtract vacation, holidays, and sick days.
Practical example: You want $80,000 take-home, have $10,000 in expenses, a 25% tax rate, 25 billable hours per week, and 48 working weeks per year. Gross revenue needed = ($80,000 + $10,000) / 0.75 = $120,000. Billable hours per year = 25 × 48 = 1,200. Hourly rate = $120,000 / 1,200 = $100/hour.
When to use this calculator: Use it when starting out as a freelancer, raising your rates, or evaluating whether a project is worth taking at the offered rate.
Tips: Most new freelancers charge too little because they compare to employee salaries without accounting for taxes and expenses. As a general rule, your freelance rate should be roughly 2–3 times what you would earn per hour as an employee doing similar work. Consider offering day rates (hourly × 8) or project-based pricing for larger jobs, which can be more profitable.