Quick answer
Your freelance rate has to cover three things an employer usually pays for: your taxes (including both halves of Social Security and Medicare), your business expenses, and the unbillable time you spend on admin, sales and time off.
Enter your take-home goal below. Example: to take home $60,000 a year with $6,000 of expenses, a 28% tax rate, 25 billable hours a week and 6 weeks off, you need to charge at least $78 an hour.
Freelance Hourly Rate Calculator
Find the rate you need to charge to hit your take-home goal after taxes and expenses.
How the calculator works
- Profit needed: your take-home goal divided by (1 minus your tax rate), plus pre-tax retirement savings.
- Gross revenue needed: that profit plus your business expenses.
- Billable hours: working weeks (52 minus weeks off) times billable hours per week.
- Minimum hourly rate: gross revenue divided by billable hours.
Not sure what tax rate to use? Our guide on how much to set aside for taxes explains why 25% to 30% is typical, and the quarterly estimated tax calculator gives a precise figure for your income.
Worked example
Sam wants to take home $60,000 a year as a freelance developer.
- Profit needed before tax: $60,000 / (1 - 28%) = $83,333
- Plus $6,000 of expenses: gross revenue needed = $89,333
- Billable hours: (52 - 6) x 25 = 1,150 hours
- Minimum rate: $89,333 / 1,150 = $77.68 an hour, or about $621 a day and $7,444 a month
Why billable hours matter most
Most freelancers bill 20 to 30 hours in a 40-hour week. The rest goes to emails, invoicing, marketing and bookkeeping. Dropping from 30 to 20 billable hours raises the rate you need by 50%. Tools like good invoicing apps and accounting software can win back some of that time.
Compare with a W-2 salary
A $60,000 employee also gets the employer's half of payroll taxes, paid time off and often health insurance and a 401(k) match. That is why a freelance rate needs to be well above the equivalent hourly wage. See W-2 vs 1099 for the tax side.
Frequently asked questions
Should I charge more than the result?
Yes. The result is a floor. Add a margin for late payers, slow months and price increases, and check what clients pay for similar work in your field.
Should I include health insurance?
Yes, as a business expense. Self-employed health premiums are often deductible, as explained in our self-employed health insurance deduction guide.
What about project pricing?
Estimate the hours a project takes, multiply by your rate and add a buffer for revisions. Many freelancers quote projects but track hours to check they hit their rate.
This tool provides general estimates, not tax or financial advice.
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About this tool
Built by the Freelancer Tax HQ editorial team using official IRS figures for the tax year shown. Last reviewed on . Results are estimates for planning, not tax advice. Read our editorial policy or report an error.
Sources
IRS: Self-Employment Tax; IRS: Estimated taxes. Example figures are FreelancerTaxHQ illustrations.