The hourly rate that actually replaces your salary — taxes, overhead and unbillable time included
60%
$—
Minimum Hourly Rate
$—
Day Rate (8 billable hrs)
$—
Gross Revenue Needed
Where the money goes
Per year
Share
Tax estimate combines self-employment tax (15.3% on ~92.35% of net, with the employer half deductible) and a blended federal income tax estimate. State tax varies — add yours to the target if applicable.
The most common freelance pricing mistake is arithmetic, not confidence: taking your old salary, dividing by 2,080 hours, and quoting that. That number silently assumes someone else still pays your health insurance, both halves of your payroll tax, your laptop, and — the big one — that every working hour is a paid hour. This calculator rebuilds the rate from the truth in the other direction: start from the take-home you need, add everything employment used to hide, divide by the hours clients will actually pay for.
Why Your Rate Must Be ~2× the Salary Math
Cost employment hides
Typical size
Self-employment tax (both halves of Social Security & Medicare)
15.3% of net earnings
Health insurance, retirement match, paid leave you now fund
$8,000–$15,000+/yr
Business overhead: software, hardware, accounting, insurance, workspace
Stack those and the rule of thumb emerges: a freelance hourly rate needs to be roughly 1.8–2.5× the equivalent employee hourly wage to leave you whole. $70,000 of employee comfort typically demands ~$120,000 of freelance gross revenue.
The Billable-Percentage Reality Check
The slider matters more than any other input. Industry surveys consistently find independent professionals bill 50–70% of their working time; new freelancers often bill under 50% while building a pipeline. Set it optimistically and your "profitable" year quietly underpays you by a third. If you genuinely bill 90%+, you likely have one anchor client — which is a different risk, priced by a different tool (see margin of safety in the Break-Even Calculator).
From Hourly to Project Pricing
Estimate honest hours for the project — then add 20–30%, because scope grows and estimates don't.
Multiply by your floor rate from this calculator. That's the walk-away number, not the quote.
Quote on value where you can: if the deliverable makes or saves the client far more than your cost, price toward that value. The hourly floor protects you; value pricing pays you.
Fixed-price only with fixed scope. Change requests get change orders — the floor rate prices those too.
How to Use the Freelance Rate Calculator
Enter the annual take-home you need — what would hit a checking account, comparable to your old net salary.
Add your real benefits cost (an ACA marketplace quote is 5 minutes) and business overhead.
Set working weeks (subtract vacation, holidays, sick weeks) and your honest billable percentage.
Read the minimum hourly rate — rounded up to the next $5, because rates ending in 0 or 5 negotiate better — and the where-the-money-goes table to see why the number is right.
Rate-Setting Tips From the Field
Never quote the floor. Quote above it; the floor is your walk-away, not your ask.
Raise rates on new clients first — existing clients get notice at renewal. A 10–20% annual step-up is normal early on.
If everyone says yes instantly, you're underpriced. A healthy close rate on quotes is well under 100%.
Retainers beat hourly for both sides: you trade a small discount for predictable billable percentage.
Frequently Asked Questions
What's a good starting rate for a new freelancer?
Run this calculator with a conservative billable percentage (40–50%) — that IS your starting rate. New freelancers need higher rates than they expect precisely because their unbillable share is highest at the start.
Should I charge different clients different rates?
Market-based variation is normal (enterprise vs nonprofit, rush work, long contracts). What shouldn't vary is the floor: no client below the calculator's minimum, however friendly.
How do taxes really work as a freelancer?
You pay self-employment tax (15.3% on ~92.35% of net profit, employer half deductible) plus ordinary income tax, via quarterly estimated payments. The calculator embeds this; the Self-Employment Tax tool breaks it out in detail.
Hourly or fixed-price projects?
Hourly protects you from scope creep; fixed-price rewards efficiency and is easier for clients to approve. Many freelancers quote fixed prices built from padded hour estimates × their floor rate — the calculator's output feeds either model.
What billable percentage should I assume?
Surveys put established freelancers at 50–70%. Use 60% as a neutral default, 45% while building a client base, and revisit with real timesheet data after three months.
Is my information private?
Yes — income targets and costs are computed locally in your browser and never leave your device.
Does the calculator include state income tax?
No — it estimates federal and self-employment tax. If your state taxes income, add a rough state amount to your take-home target so the rate covers it.
Your rate is a business decision, not a self-esteem score. Build it from costs upward — this calculator is the floor — then price toward value from there. The freelancers who last are rarely the cheapest; they're the ones whose math worked.