Freelance rate calculator

A freelancer who wants to keep $90,000 a year, after paying $9,000 of business costs, $7,200 of health insurance and $10,000 into retirement savings, has to invoice $166,194. Over 1,104 billable hours that is $150.54 an hour, or $1,204 a day. Of each dollar invoiced, 54 cents is take-home, 13 cents is self-employment tax and 12 cents is income tax and state tax. The same income as an $85,000 job takes 2.76 times the job’s hourly wage, not the 1.5 times that the usual rule of thumb suggests.

The calculator works backward from your take-home through the real 2026 federal tax, not a guessed rate, and gives the hourly, day, week and month rate. It also tests the flat-rate shortcut, shows how much your billable share matters, prices a project with a buffer, and finds the rate that matches a job.

Who reaches for this

You enter the take-home you want, your filing status, a state rate and any other household income. You enter your costs: business expenses, health insurance you pay, retirement savings, platform and payment fees and the share of invoices you never collect. And you enter your time: weeks off, hours worked in a week, and the share of them that you bill.

The calculator then finds the revenue that leaves your take-home after the tax stack. It uses the same engine as the 1099 tax calculator: self-employment tax on 92.35% of profit, the QBI deduction, the standard deduction, the 2026 brackets and your state rate. Because tax rises with profit, it corrects a trial revenue until the take-home matches. If you already know your rate and want to see how many hours cover your costs, the freelancer profitability calculator answers the opposite question.

Nearly every freelance rate calculator works the same way. Add your target income and your expenses, divide by one minus a tax rate, and divide by billable hours. The tax rate is a number you supply, usually 25% or 30%, sometimes described as “25% to 40%.” One popular tool skips tax altogether.

The shortcut has three problems. The first is that the rate is a guess, and the right one changes with income. The second is a mistake in the arithmetic, and the third is what the formula leaves out.

The right rate changes with income

Self-employment tax is a flat 15.3% on most profit, and income tax is progressive, so the share of profit that goes to tax rises with the take-home. The QBI deduction lowers it at moderate incomes. The result for the example inputs is below.

A flat 30% is close at $90,000 and wrong everywhere else: too high at $40,000, where the tax and fees take 24.9% of the invoice, and too low at $250,000, where they take 39.3%. Anyone who guesses 25% and earns $150,000 undercharges by several dollars an hour without knowing why.

It grosses up deductible expenses

The common formula is (income + expenses) ÷ (1 − tax rate). Expenses are deducted before tax, so they should be added after the gross-up, not inside it. For $9,000 of expenses at 30%, the formula collects $9,000 ÷ 0.70 = $12,857, or $3,857 more than the expenses. On 1,104 hours that is $3.49 an hour, and it hides in the rate as padding.

It leaves things out

Most versions leave out health insurance, retirement savings, platform fees and unpaid invoices. Put the example through the usual formula, $90,000 plus $9,000 of expenses divided by 0.70, and you get $141,429, or $128.11 an hour. That rate, billed in full, leaves $74,822 after the actual tax stack and the insurance and savings, which is $15,178 short of the goal. Add health insurance and retirement to the numerator and the shortcut lands at $150.36 and leaves $89,881, $119 under the goal. That happens because 30% is close to right for this income, and it would not hold at another.

The rate must cover everything between an invoice and your bank account. In the example, $166,194 invoiced is divided like this.

The total tax of $41,685 is 28.0% of the $148,885 net profit. The next dollar of profit costs 35.5% in tax, because self-employment tax (about 14 cents per dollar), the 22% federal bracket, reduced by the QBI deduction, and the 5% state rate stack. You invoice $1.85 for each dollar you keep.

Self-employment tax

An employee pays half of Social Security and Medicare tax and the employer pays the other half. A freelancer pays both, 15.3% on 92.35% of net profit, up to the Social Security wage base of $184,500 in 2026, with Medicare tax above that. Half of it is deductible for income tax. It is the largest single tax in the example, and it is why the freelancer’s rate has to rise above an employee’s wage even before benefits.

Health insurance and retirement

An employer pays part of the premium and often matches retirement savings, and neither shows up in a salary. A freelancer pays them, so they belong in the rate. Health insurance premiums for the self-employed and contributions to a retirement plan are deductible from income, though not from self-employment tax, and the calculator applies both.

Fees and bad debt

Platforms and payment processors take a percentage, and some invoices are paid late or never. Enter both as percentages. In the example, 3% for fees and 2% for uncollected invoices raise the invoiced revenue by 5.3% and cost $8,310 a year. Keeping a record of both for a year replaces the guess.

The divisor of the formula is the hours you can bill, and it is the input most often overstated. Take 52 weeks, subtract weeks off, multiply by hours worked in a week, and multiply by the share you bill. With 6 weeks off, 40-hour weeks and 60% billable, that is 46 × 40 × 0.60 = 1,104 hours, 138 eight-hour days.

The other 736 hours are not idle. They go to finding clients, writing proposals, invoicing, bookkeeping, learning and the work that makes the billable hours possible. They are real work that no client pays for, and the rate has to cover them. Guides cite 50% to 70% as a typical billable share. I could not trace the figure to a source, so measure your own by tracking a month or two of time.

Going from 40% billable to 80% halves the rate needed, from $226 to $113 an hour. That is a larger effect than any other input. Weeks off matter less: two weeks off needs $138 an hour and ten weeks $165. So if you need to bring the rate down without a cut in income, the fastest way is to raise the share of time you bill, through repeat clients, a retainer or fewer hours of proposals for work you do not win.

Be honest about time off. Public holidays, a week when you are ill and the weeks between contracts are unpaid, and a freelancer who plans for two weeks and takes six will earn less than planned. The calculator takes weeks off as one number so that all of it counts.

Finding your own billable share

Track every working hour for four to six weeks, in two buckets: time a client pays for and time they do not. Include the small things, such as email with prospects, invoicing and the time spent switching between clients, since they are where the hours go. A simple timer or a spreadsheet is enough. If your share is 55%, use 55%, and if it is 75% because you work with a few long-term clients, use that. The result is more useful than any published average, and it will change as your client mix does.

Retainers and repeat clients

Repeat work is the cheapest way to raise your billable share, since it removes most of the selling. If retainer clients moved the example freelancer from 60% to 70% billable, the rate needed for the same take-home would fall from $151 to $129 an hour, and the extra $22 could be passed on as a lower price, a higher margin or more time off.

The annual number turns into the rates a client sees. In the example, $166,194 ÷ 1,104 hours is $150.54 an hour. Multiplied by an 8-hour day that is $1,204. Divided by the 46 weeks worked it is $3,613 a week, and by 12 months it is $13,850.

A day rate is not just the hourly rate times eight. A client booking a day takes the whole day, including the hours you would spend on admin around it, and you cannot sell that day to anyone else. Some freelancers add a premium for a day booked and some offer a discount for a longer commitment. The calculator gives the arithmetic. What to charge above it is a judgment about value and demand.

The rates are floors. They say what work must earn to give you the take-home you want, given how much you can bill. They are not what the market will pay, and they do not say whether the market pays them. Compare the result with what clients in your field pay, and if the floor is above it, the levers are costs, billable share, the take-home target and the kind of work you take.

Many people ask the question the other way round: what rate matches the job I have? The calculator works out the job’s take-home and then the freelance rate that leaves the same amount, with your own costs and time.

An $85,000 salary for a single filer in a state with a 5% income tax has $9,870 of federal income tax, $6,503 of Social Security and Medicare and $4,250 of state tax. Take-home is $64,378, and the wage is $40.87 an hour on 2,080 hours. To leave the same $64,378 after paying $9,000 of expenses, $7,200 of insurance and $10,000 of retirement savings, the freelancer must invoice $124,388, or $112.67 an hour at 60% billable. That is 2.76 times the job’s wage.

The popular rule says to charge 1.3 to 1.5 times an employee’s rate. One guide states it, and then works an example that needs 2.47 times. The rule is only right for someone who bills most of their time, has few costs and needs no benefits. At realistic utilization the multiple is 2 to 3.3 times. The reasons are the ones above: the freelancer pays both halves of payroll tax, buys the insurance and retirement plan the employer provided, and is paid for only part of the hours worked. The employee vs. contractor calculator compares the two from an employer’s side, and the hourly to salary calculator converts a wage to a salary.

The comparison is simple by design. It does not value the job’s benefits beyond salary, such as paid leave, a pension or job security, and it treats the freelancer’s health and retirement as costs to cover. A job with generous benefits is worth more than its salary, and that pushes the matching rate higher.

A project fee is the estimated hours times the hourly rate, plus a buffer for changes, revisions and the time it takes to hear back. For 120 hours at $150.54 with a 20% buffer, the fee is $21,678. What that fee earns depends on how long the work takes.

A buffer is not padding. It is an allowance for the fact that estimates run short. If you track actual hours against estimates on past projects, you can set the buffer from your own record: a freelancer who finishes at 1.3 times the estimate should price at 1.3 times. Scope terms matter too. A fixed fee with unlimited revisions turns every overrun into a discount, and a clear list of what is included, with a rate for changes, turns an overrun into more revenue.

Fixed fees have an upside. If you work faster than the estimate, your hourly earnings rise without the client noticing, which is one reason value-based pricing can beat hourly billing. The freelancer profitability calculator covers per-client profitability and retainer pricing.

A higher rate is the one lever that needs no extra hours, and its value after tax is smaller than it looks. Raising the example rate by $10 an hour adds $10 × 1,104 = $11,040 of invoiced revenue. After 5% for fees and bad debt, and self-employment tax, federal income tax and state tax at the margin, you keep 61.3% of it, or $6,766 a year.

The rest goes to tax and fees because the extra profit sits at the top of your brackets. It is still real money, and it compares well with alternatives: to earn the same extra $6,766 at today’s rate you would need about 73 more billable hours, which at a 60% billable share is roughly 122 more working hours a year. The calculator shows the raise in the last block so that you can test other amounts by changing the rate inputs.

Rates should rise over time. Costs go up, your skills improve and inflation erodes a fixed rate. A yearly review, with a rise for new clients first and existing ones at renewal, keeps the rate in line with the floor the calculator gives.

Guides publish benchmarks by experience level, such as $35 to $75 an hour for junior freelancers, $75 to $125 for mid-level, $125 to $200 for senior specialists and $200 to $500 for consultants. Others say most freelancers undercharge by 30% to 50%, that only 50% to 70% of time is billable, and that a $60,000 freelance income is roughly equivalent to a $40,000 employee salary. I could not trace any of these to a primary source, and they span very different fields and countries.

Use them as a rough check at most. What a client pays depends on the field, the region, the value of the work and your alternatives, and a table cannot capture those. The rate this page computes is a floor from your own numbers, and the market rate for your work is a separate question that job postings, peers and your own history answer better than a chart.

See the tax on your freelance income in detail with the 1099 tax calculator, or work out how many hours you need at your current rate with the freelancer profitability calculator.