Freelance Rate Calculator
Set an hourly and day rate that actually replaces your salary once self-employment tax, benefits, overhead and unbillable hours are counted.
Health insurance, retirement, what an employer covered.
Software, insurance, equipment, accounting.
Admin, sales and email are unbillable — 50 to 70% is typical.
The naive salary-to-hourly split says $43.27. Your real rate is 2.3× that, because only 1,152 of your hours can carry the whole year's costs.
Your old salary is the wrong starting point
The most common freelance pricing mistake is dividing last year’s salary by 2,080 hours and calling it a rate. That number silently assumes an employer is still paying half your payroll tax, all of your health insurance, your software and your slow weeks. Nobody is.
This calculator prices the whole machine — the salary you want out of it, the self-employment tax layered on top, the benefits you now buy retail (per BLS data, benefits run near 30% of employee compensation), and the overhead of operating.
The billable-hours reality
The quiet variable is the denominator. A forty-hour week is not forty billable hours — proposals, bookkeeping, marketing and email are real work no client pays for. At a healthy 60% billable share with four weeks off, a full-time freelancer sells roughly 1,150 hours a year, not 2,080.
Spreading full-year costs across barely half the hours is why sustainable freelance rates look “high” to employees — and why freelancers who match employee hourly rates quietly earn far less than they did on payroll.
Sanity-check the answer both ways
Once you have the rate, test it against the market for your skill — this calculator prices your costs, not your value, and specialists often clear the floor by multiples. Then test the whole arrangement with the 1099 vs W-2 comparison, which answers the adjacent question — whether the independent path beats the salaried offer at all.
How this is calculated
Required revenue = target salary × 1.0765 (employer-half FICA) + benefits you now buy + business overhead Billable hours = hours/week × weeks worked × billable share Hourly rate = required revenue ÷ billable hours
Frequently asked questions
- How do I set my freelance rate?
- Work from costs, not from your old paycheck. Your rate must cover the salary you want, the employer-side payroll tax you now owe yourself, the benefits an employer used to buy, your business overhead — all spread across only the hours clients actually pay for.
- Why is the rate so much higher than my old salary divided by 2,080?
- Because that division assumes every working hour is a paid hour and every cost is covered by someone else. Freelancers typically bill 50 to 70 percent of their time — proposals, invoicing and email fill the rest — and carry costs employees never see. The realistic multiplier lands between 1.5× and 2×.
- What billable percentage should I assume?
- New freelancers routinely assume 90% and learn otherwise. Sixty percent is a sane planning figure for solo consultants; heavy client rotation or lots of small projects push it lower. Track one honest month and replace the guess.
- Should I charge hourly or per project?
- Use the hourly figure as your internal floor even when quoting fixed prices — estimate the hours, multiply, add margin for revisions. Project pricing rewards efficiency; hourly caps your upside at the clock.