Freelance Rate Calculator - What Should I Charge?
"What should I charge?" is the hardest question in freelancing. Start from the take-home pay you actually want, and this calculator works backwards through self-employment tax, federal and state income tax, your expenses, and the hours you can realistically bill - to give you the hourly and day rate that gets you there. Figures are for US tax year 2025.
Why a freelance rate must exceed a salaried hourly rate
It's tempting to take a salary you'd be happy with, divide by 2,080 hours, and call that your rate. That number is far too low. As a freelancer you carry costs an employer normally absorbs:
- Self-employment tax: you pay the full 15.3% Social Security and Medicare tax, where an employee pays only half and the employer covers the rest.
- No benefits: health insurance, retirement contributions, and any 401(k) match come entirely out of your own pocket.
- Unpaid time off: every vacation day, holiday, and sick day is income you don't earn.
- Non-billable hours: sales, admin, invoicing, and learning take real time you can't bill a client for.
- Business expenses: software, equipment, insurance, and other costs reduce what you actually keep.
Billable-hour utilization
The single biggest lever on your rate is how many hours you actually bill. Almost no freelancer bills a full 40-hour week - once you subtract marketing, admin, and downtime between projects, realistic utilization is often 50% to 70%. If you work 40 hours but only bill 25, the income you need has to come from those 25 hours, which pushes your rate up substantially. Set the billable-hours figure honestly; an optimistic number produces a rate that quietly leaves you short.
Set a floor, then add margin
The rate this calculator returns is a floor - the minimum that hits your take-home goal under the assumptions you entered. Real pricing should sit above it. Add a margin for slow months, for the value you deliver to a client, and for the simple fact that you want to grow, not just break even. If a client negotiates you below the floor, you now know exactly what you're giving up.
Frequently asked questions
How do I figure out what to charge as a freelancer? +
Work backwards from the take-home pay you actually want. This calculator takes your desired after-tax income, adds back the self-employment tax, federal and state income tax, and business expenses you'll owe, then divides that gross figure by the hours you can realistically bill. The result is the hourly rate that leaves you with your target in your pocket.
Why does a freelance rate have to be higher than a salaried hourly rate? +
A salaried employee's hourly figure hides a lot. As a freelancer you pay the full 15.3% self-employment tax (an employee pays half), you fund your own health insurance and retirement with no employer match, your time off is unpaid, and you spend unbillable hours on admin and sales. A useful rule of thumb is that a freelance rate often needs to be 1.5x to 2x the equivalent salaried hourly rate just to come out even.
What are billable hours and why do they matter? +
Billable hours are the hours a client actually pays for. The rest of your week goes to invoicing, marketing, email, learning, and downtime between projects. Most freelancers bill only 50% to 70% of their working hours, so a 40-hour week might yield 20 to 28 billable hours. The calculator lets you set this directly because it dramatically changes the rate you need.
How many weeks a year should I assume I'll work? +
Almost no one bills 52 weeks. Account for vacation, holidays, sick days, and slow periods between clients. Many freelancers plan around 46 to 48 working weeks. Lowering this number raises the rate you need, because the same annual income has to come from fewer weeks.
Should I just use the rate this calculator gives me? +
Treat it as a floor, not a ceiling. The number it produces is the minimum rate that hits your take-home goal with the assumptions you entered. From there, add a margin for profit, slow months, and the value you deliver. Charging only the break-even rate leaves you with no cushion when a client disappears or a project runs long.
Does the rate include self-employment and income tax? +
Yes. The gross income the tool targets is sized so that after self-employment tax, federal income tax, your effective state income tax, and your business expenses, your remaining take-home equals the figure you entered. You don't need to add anything on top for taxes - that's already baked in.
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