Freelance hourly rate calculator
Most freelancers price by dividing a salary by 2,080 hours and wonder why the money never adds up. This works backwards properly — from the take-home you want to the rate that delivers it.
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Enter the take-home you want and this works backwards to the rate that actually delivers it.
- Revenue needed
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- Billable hours
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- Unbillable hours
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- Weeks worked
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How this is worked out
The calculator works backwards from the money you want to end up with.
It starts with your target take-home plus what you want to put into retirement, and grosses that up for tax by dividing by one minus your expected tax rate, rather than adding the tax on top. That matters: $88,000 after a 25% rate needs $117,333 of profit, not $110,000. Business expenses and health insurance are then added to give the revenue you need to bring in.
Next it works out the hours you can actually invoice. Take 52 weeks, remove your weeks off, multiply by your working hours per week, then by the share of those hours that are billable.
Say you want $80,000 of take-home and $8,000 for retirement at a 25% tax rate, with $6,000 of expenses and $7,200 of health insurance. You need $130,533 of revenue. With six weeks off, 40-hour weeks and 65% billable, you have 1,196 billable hours, so the rate is about $109 an hour, or $873 for an eight-hour day.
The tax rate is whatever you enter, so use a figure that includes self-employment tax (the quarterly tax calculator can give you one). The calculator treats retirement savings as coming from after-tax money. If you contribute pre-tax to a solo 401(k) or SEP, the true rate you need is a little lower than shown.
Sources
Common questions
How do I work out my freelance hourly rate?
Start from the take-home you want, add the tax you will owe on it, add business expenses, health insurance and retirement, then divide by the hours you can actually bill — not the hours you work. The gap between those two numbers is what most rate calculations miss.
What percentage of my hours will be billable?
Most established freelancers bill 60–75% of their working hours. Sales, admin, invoicing, learning and unpaid revisions fill the rest. Assuming 90% billable is the single most common way a freelance rate ends up being a pay cut.
Why is a freelance rate so much higher than an equivalent salary?
Because it has to cover things an employer used to pay for: both halves of payroll tax, health insurance, retirement, paid holiday, sick days, equipment, software and the weeks between contracts.
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What people use next
Estimates based on published federal rules for tax year 2026. State and local tax is not included. This is general information, not advice about your situation.