Freelance Rate Calculator
Calculate your ideal freelance hourly rate based on your income goals, business expenses, vacation time, and billable hours.
What you want to take home before taxes
Software, insurance, equipment, marketing, etc.
Unpaid time off per year
Hours you can actually bill clients (not admin, marketing, etc.)
Results
Minimum Hourly Rate
$75.10
Suggested Rate (+20% buffer)
$90.12
Equivalent Full-Time Salary
$104,000.00
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Running a business from spreadsheets in your head? Our Small Business Bundle includes client tracker, invoice template, expense log, P&L, and project planner.
How This Calculator Works
Most freelancers undercharge because they calculate their rate by dividing a desired salary by 2,080 hours (40 hours times 52 weeks). This ignores the reality that freelancers cannot bill every working hour, need to cover their own business expenses, and do not get paid vacation.
This calculator accounts for all three factors. It subtracts your vacation weeks, uses your realistic billable hours (not total working hours), and adds business expenses to your income target. The result is the minimum hourly rate you need to charge to hit your financial goals.
The "equivalent salary" shows what a full-time employee would need to earn to match your freelance income, factoring in the roughly 30% value of employer-provided benefits (health insurance, retirement match, paid time off). This number helps when negotiating with clients who compare your rate to employee salaries.
Frequently Asked Questions
Why is the suggested rate 20% higher than the minimum?
The 20% buffer accounts for slow months, unexpected expenses, client delays, and the reality that you will not always be at full capacity. Without a buffer, one slow month can put you behind on your annual income target.
Why are billable hours only 25 per week?
Most freelancers only bill 50-60% of their working hours. The rest goes to admin work, invoicing, client communication, marketing, proposals, and professional development. If you bill more than 30 hours per week, you are likely underinvesting in business growth.
How do I justify my rate to clients?
Frame your rate in terms of value, not hours. Instead of saying "I charge $75/hour," say "This project will cost $3,000 and will [specific outcome]." When clients see the value they receive, hourly rate becomes less relevant.
What about taxes?
This calculator shows pre-tax income. As a freelancer, you owe self-employment tax (15.3%) plus income tax. A common rule of thumb is to set aside 25-35% of gross income for taxes. Factor this into your desired annual income.