Freelance Rate Calculator
Calculate the hourly rate you need to charge, accounting for expenses, taxes and non-billable time.
How this calculator works
- Enter your target annual take-home income and your estimated annual business expenses (software, equipment, insurance).
- Enter a tax savings percentage to set aside for self-employment and income taxes.
- Enter how many hours per week you can actually bill clients, and how many weeks per year you'll work.
- The calculator grosses up your target for expenses and taxes, then divides by your total billable hours for the year.
Freelancers and contractors don't get to bill every hour they work — there's admin time, marketing, and time off — and they're also responsible for their own taxes and business expenses. This calculator builds all of that into the rate you need to charge to hit a real take-home income target.
Example
Targeting $60,000 take-home, $8,000 in expenses, a 25% tax buffer, billing 25 hours/week for 46 weeks/year (1,150 billable hours): required revenue = ($60,000 + $8,000) ÷ (1 − 0.25) ≈ $90,667. Hourly rate ≈ $90,667 ÷ 1,150 ≈ $79/hour.
Limitations
This is a planning estimate, not tax advice — actual self-employment tax obligations depend on your income, entity structure and location. Consult a tax professional for exact figures.
Frequently asked questions
Why is my freelance rate higher than a simple salary-to-hourly conversion?
Because you're not billing every working hour (admin, marketing, unpaid pitches eat into your week), and you're responsible for taxes and business costs an employer would otherwise cover — this calculator builds all of that in.
How much should I set aside for taxes?
It depends heavily on your income level, location and business structure — many freelancers use a range around 25–30% as a starting buffer, but check with a tax professional for your specific situation.
What counts as billable hours?
Only the hours you can actually invoice a client for — not time spent on admin, proposals, or your own marketing.
Should I include health insurance in business expenses?
Yes — as a freelancer, insurance, equipment, software subscriptions and other costs an employer would normally cover should be included in your annual business expenses estimate.