Freelance Rate Calculator
The rate that gets you the take-home you want — after self-employment tax, income tax, overhead, health insurance, retirement, and the hours you actually bill (not the hours you work). Pairs with the Freelancer Tax Estimator.
Income goal
Billable capacity
Costs
Where every dollar goes
Estimate only. Not tax or financial advice. Real-world variables: quarterly estimated tax timing, self-employed health insurance deduction eligibility, retirement contribution limits by plan type (SEP-IRA vs. Solo 401(k) differ significantly), state tax brackets (this uses flat rates), Additional Medicare Tax (0.9% on income above $200k/$250k), business-use-of-home deductions, section 199A QBI deduction, and dependent situations. For actual planning, cross-check with a CPA and use the Freelancer Tax Estimator once you have real numbers to plug in.
Why your freelance rate needs to be higher than you think
Most new freelancers price themselves the way an employee thinks about salary: "I made $80k at my last job, so I’ll charge $40/hour" ($80k ÷ 2000 hours). That’s the fastest path to burning out at half the income. Real freelance rates have to cover four things a W‑2 employee never sees on their paycheck.
1. The employer half of payroll taxes
As a W‑2 employee, your employer pays 7.65% of your wages toward Social Security and Medicare. As a freelancer, you pay both halves — 15.3% self-employment tax on 92.35% of your net earnings. On $100k of net profit that’s roughly $14,130 before you touch federal income tax. Half of it is deductible, which softens the blow, but the cash still leaves your account.
2. Unbillable hours
A 40-hour workweek doesn’t mean 40 billable hours. Sales calls, proposals, invoicing, admin, learning, marketing, and the gaps between projects all eat into what a client actually pays for. Industry averages land around 60–70% utilization. A generous 70% utilization on a 40-hour week is 28 billable hours — not 40.
3. No employer benefits
Health insurance premiums that a large employer buys at group rates for $500/month can run $700–$1,500/month on the individual market. Retirement contributions have no employer match. No paid time off, no sick leave, no short-term disability, no dental. Every one of those comes out of your billable rate.
4. Overhead that never showed up on your salary
Your employer paid for the software, the laptop, the office, the electricity, the ergonomic chair, the professional licenses, and often the training. As a freelancer, all of it comes off the top. Even a lean solo setup runs $4k–$10k/year.
The rule-of-thumb doesn’t work anymore
You’ll see “multiply your target salary by 2 or 2.5 for your freelance rate” a lot online. That worked when health insurance was $200/month and SE tax was smaller as a share of income. Today, for most US freelancers at typical take-home targets, the multiplier lands closer to 2.5–3.5x depending on state, health insurance costs, and retirement contribution. The calculator above works it out from the actual numbers instead of a rule of thumb.
Related tools
- Freelancer Tax Estimator — plug in real income numbers once you’ve been operating.
- Paycheck Calculator (W‑2) — compare take-home on a salary vs. freelancing.
- LLM API Cost Calculator — add API spend to your overhead.
- All Financial Calculators