In short: A freelance hourly rate is the income you want to keep, plus business costs and the taxes on your profit, divided by the hours you can bill in a year. To keep $60,000.00 with $6,000.00 of costs, 12% income tax and US self-employment tax, over 46 weeks of 25 billable hours, you need $75.05 an hour, or $600.40 for an 8-hour day.
How to use the freelance rate calculator
- Say what you want to keep. Enter the yearly income you want after business costs and taxes, and your business costs a month or a year: software, equipment, insurance, a coworking desk, an accountant, health insurance you pay yourself.
- Count your real time. Weeks off are every week with no billable work: vacation, public holidays and sick days. Billable hours are the hours a week you charge for, which for most freelancers is well under the hours they work.
- Add the taxes. Leave US self-employment tax on if you file in the US as a sole proprietor or single-member LLC, pick the tax year, and enter your own estimate of income tax as a percentage.
- Read the rate. You get the hourly rate, rounded up to the cent so it always reaches your target, the day rate, and a table of where each year's revenue goes. Type a rate you already charge, or a client's offer, to see what it leaves you.
Everything updates as you type and nothing leaves your browser. Copy the result as text for your notes, or copy a share link that opens the same figures, for an accountant or a business partner.
The freelance hourly rate formula, worked through
To set a freelance rate, work out how much to charge starting from the end: the revenue you need is your income, plus costs, plus the taxes on the profit. Then divide by billable hours. The example freelancer wants to keep $60,000.00 a year, spends $500.00 a month ($6,000.00 a year) on the business, takes 6 weeks off and bills 25 hours in each of the other 46 weeks, which is 1,150 billable hours. At $75.05 an hour the year looks like this:
| Item | A year |
|---|---|
| Revenue at this rate | $86,307.50 |
| Business costs | $6,000.00 |
| Self-employment tax | $11,347.09 |
| Income tax at 12% | $8,956.07 |
| What you keep | $60,004.34 |
The profit is $86,307.50 - $6,000.00 = $80,307.50. Self-employment tax is 15.3% of 92.35% of that, $11,347.09. Income tax at 12% is charged on the profit less half the self-employment tax, $8,956.07. What is left is $60,004.34, a few dollars over the target because the rate is rounded up to the cent. Without any tax the same year would need only $57.40 an hour, so in this example taxes add $17.65 to every billable hour.
Already charge $75.00 an hour? The check box answers that: at $75.00 the example keeps $59,961.37, just short, and would need 25.1 billable hours a week to reach the target.
Self-employment tax: what most freelance rate calculators get wrong
Many calculators add 15.3% to the whole income or ask for one tax rate to cover everything. The IRS rule is narrower. Self-employment tax is charged on net earnings, which are 92.35% of your profit, and the IRS spells out the step in its small business tax guide:
To figure net earnings using the regular method, multiply your self-employment earnings by 92.35% (0.9235).
The rate on those net earnings is 15.3%: 12.4% for Social Security and 2.9% for Medicare, as the IRS page on self-employment tax sets out. Three details move the figure. No self-employment tax is due when net earnings are under $400. The Social Security part stops at the year's wage base, which the Social Security Administration lists as $184,500.00 for 2026 and $192,300.00 for 2027, while Medicare has no cap. And half the tax is deducted before income tax, which is why the calculator takes income tax on the profit less that half.
In the example, 15.3% of the whole $80,307.50 profit would be $12,287.05, $939.96 more than the real $11,347.09. At higher incomes the cap matters more: on $250,000.00 of profit the 2026 tax is $29,573.38, not $38,250.00, and in 2027 it is $30,540.58 because the wage base rises. Choose the tax year your work will be paid in.
Billable hours: why 2,080 is the wrong divisor
A salaried year is 40 hours x 52 weeks = 2,080 hours, with paid holidays and paid time off. A freelancer is paid only for the hours a client is billed. Weeks off come out of the year, and in a working week the hours that go to finding work, quoting, invoicing, bookkeeping and learning are unpaid. That is why $60,000.00 divided by 2,080, $28.85, is far below the $75.05 the example needs. The table shows how the rate for the same $60,000.00, $6,000.00 of costs and taxes moves with billable hours and weeks off:
| Billable hours a week | 4 weeks off | 6 weeks off | 8 weeks off |
|---|---|---|---|
| 20 hours | $89.90 | $93.81 | $98.08 |
| 25 hours | $71.92 | $75.05 | $78.46 |
| 30 hours | $59.94 | $62.54 | $65.39 |
Going from 25 to 20 billable hours raises the rate more than taking two extra weeks off, because the hours shrink every working week. If you are not sure of your billable hours, the work hours calculator adds up a tracked week, and the hourly to salary calculator shows what an employee's hourly rate is a year, for comparing a freelance quote with a job offer.
Freelance day rate, contractor rate and 1099 work
The day rate is the hourly rate times the hours in a client day, so $75.05 x 8 hours is $600.40; set the hours to whatever a day means in your contracts. The same sums apply to a contractor rate or 1099 work: a client who pays you as an independent contractor withholds no tax, so the self-employment tax and the income tax are yours to set aside. The calculator does not include the 0.9% Additional Medicare Tax above $200,000 for a single filer, wages from a job that use up part of the wage base, or deductions beyond the half of self-employment tax; put your own effective rate in the income tax box to cover them, and ask a tax professional for your own case.
Retainers and project prices come from the same hourly figure: estimate the billable hours a project will take, multiply by your rate, and add a margin for revisions. The business days calculator counts the working days in a project window.
Esta calculadora también está en español: la calculadora freelance, con el impuesto sobre el trabajo por cuenta propia de Estados Unidos y cantidades en dólares.
Questions people ask
How do I calculate my freelance hourly rate?
Add the income you want to keep, your business costs and the taxes on your profit, then divide by the hours you can bill in a year. With $60,000.00 to keep, $6,000.00 of costs, 12% income tax and US self-employment tax, a year of 46 weeks at 25 billable hours (1,150 hours) needs $86,307.50 of revenue, which is $75.05 an hour.
How do I turn a salary into a freelance rate?
Do not divide the salary by 2,080. Enter the salary as the income you want to keep (or, to compare before income tax, set income tax to 0), then your real weeks off and billable hours. In the example, $60,000.00 over 2,080 hours is $28.85 an hour, but the freelance rate that keeps the same amount is $75.05, 2.6 times as much, because a freelancer pays for their own time off, unbilled hours, costs and both halves of Social Security and Medicare.
How is the day rate worked out?
The day rate is the hourly rate times the hours in a client day: $75.05 x 8 = $600.40. Set Hours in a client day to what a day means in your contracts, such as 7.5. The day rate does not change the yearly figures, which come from your billable hours a week.
What is self-employment tax and how much is it?
It is Social Security and Medicare for people who work for themselves: 15.3% (12.4% Social Security and 2.9% Medicare) on 92.35% of the year's profit, with nothing due when that is under $400. The Social Security part stops at the wage base, $184,500.00 for 2026 and $192,300.00 for 2027, and half the tax is deducted before income tax. On the example's $80,307.50 of profit it is $11,347.09.
What does the calculator leave out?
Your income tax is your own estimate, so credits, deductions such as the qualified business income deduction, and state rules are up to that figure. The self-employment tax assumes you have no wages from a job in the same year, which would use part of the Social Security wage base, and leaves out the 0.9% Additional Medicare Tax that applies above $200,000 for a single filer. It is a pricing tool, not tax advice.
How many billable hours should I assume?
Only you know, so measure it: track a few typical weeks and count the hours you could charge for, not the hours you worked. Sales, admin, invoicing, learning and unpaid revisions all take time that no client pays for. Try a few values in the calculator; the table on this page shows how much the rate moves between 20, 25 and 30 billable hours a week.
Is anything I type sent anywhere?
No. The calculator runs in your browser. Copy share link puts your figures in the part of the address after the #, which browsers never send to a server, so only the people you give the link to see them.