Freelance Hourly Rate Calculator

Why "just charge what a job pays, divided by hours" gets freelancers underpaid

A salaried job quietly covers a long list of costs on your behalf: paid vacation, sick days, health insurance, payroll tax matching, software licenses, a computer, office space. When you freelance, every one of those either comes out of your rate or doesn't exist. This calculator works backward from the income you actually want to take home to the hourly rate that covers it — including the expenses, taxes, and unpaid time a salary already absorbs for you.

How to use it

• Enter the annual take-home income you want to actually keep, after taxes and business costs.
• Add your annual business expenses — software subscriptions, insurance, equipment, marketing, coworking space, accounting or invoicing tools, anything that comes out of your business income.
• Set a tax set-aside percentage as a rough planning estimate for income tax plus self-employment tax (contractors typically set aside 25-30% in the US, though your actual rate depends on your income bracket and location).
• Enter unpaid weeks off per year — vacation, holidays, sick time, and slow periods where no billable work happens, since none of that is paid the way it would be at a salaried job.
• Enter your realistic billable hours per week — the actual hours you spend doing paid client work, not the total hours you're "working" once you count admin, proposals, invoicing, and marketing. This number is almost always lower than people expect; 20-30 billable hours in a 40-hour work week is typical for solo freelancers.

Why billable hours matter more than total hours worked

Most freelancers dramatically overestimate how many hours per week are actually billable. Between client communication, proposals, invoicing, admin, and marketing to find the next project, it's common for only half of a working week to be billable time. If you calculate your rate assuming all 40 hours are billable, you'll come up short every single month — this is one of the most common freelance pricing mistakes, and it's exactly what the "Billable Hours Per Week" field is built to correct for.

Real-world use cases

• Setting your first freelance rate: Work backward from a target income instead of guessing a number that sounds reasonable.
• Raising your rate: Recalculate after a jump in expenses (new software, health insurance) or a change in how many hours you can realistically bill.
• Comparing a contract offer to going full-time: Use the salary-equivalent comparison at the bottom of the results to sanity-check whether a day rate or project quote actually beats a salaried offer once taxes and time off are accounted for.
• Quoting project or day rates: Use the daily rate output as a starting point for project-based quotes instead of only ever billing hourly.

Frequently asked questions

What's a realistic number of billable hours per week?

Most solo freelancers land somewhere between 20 and 30 billable hours in a standard work week once admin, sales, and communication time is subtracted out — treat 40 as unrealistic unless you have dedicated help with the non-billable side of the business.

How much should I set aside for taxes as a freelancer?

In the US, self-employed workers typically set aside 25-30% of net income to cover federal income tax and self-employment tax (which covers both the employee and employer portions of Social Security and Medicare) — but your real number depends on your total income, deductions, and location, so treat this field as a planning estimate, not tax advice.

Should my freelance rate really be higher than my old salary divided by hours?

Yes, and this is the most common surprise for people leaving a salaried job. A salary already has taxes withheld separately, often includes benefits (health insurance, retirement matching, paid time off) worth a meaningful percentage of total compensation, and doesn't require you to buy your own software or cover slow months.

How is this different from a general hourly wage calculator?

A basic hourly wage calculator just divides a salary by hours worked. This tool works in the other direction — starting from your desired take-home income and grossing it up for taxes, business expenses, and unpaid time off before dividing by only the hours you can actually bill, which is how freelance and contract rates are supposed to be built.