Freelance Hourly Rate Calculator
Find the freelance hourly rate you must charge to hit a target take-home. Covers self-employment tax, unpaid weeks off, health insurance, and expenses.
Freelance Hourly Rate Calculator
Name your take-home. Get the rate you have to bill.
Target Annual Take-Home
Your target take-home is the cash left in your pocket after self-employment tax, federal and state income tax, business expenses, health insurance premiums, and retirement contributions are all paid.
Filing Status
Sets your standard deduction, federal brackets, and Additional Medicare threshold.
State
Sets your state income tax.
Billable Hours Per Week
Hours you actually invoice, not hours worked. Most freelancers bill 20 to 30.
Unpaid Weeks Off Per Year
Vacation, holidays, sick days, and gaps between clients.
Annual Business Expenses
Deductible Schedule C costs: software, hardware, insurance, fees, travel.
Annual Health Insurance Premium
What you pay for your own coverage. Deductible under Section 162(l).
Annual Retirement Contribution
Solo 401(k) or SEP-IRA. Treated as fully deductible.
Apply QBI Deduction (Section 199A)
20% qualified business income deduction.
Estimates only, for 2026 tax year planning. Not tax or legal advice. Actual liability depends on your full return, deductions, credits, local taxes, and business structure. Consult a CPA before setting rates or filing.
Where Every Billed Dollar Goes
Tax Inside Your Rate
Equivalent W-2 Salary
Assumes the employer pays your health premium (the single biggest reason the freelance number is larger), that your retirement contribution goes in pre-tax to a 401(k), and that there is no employer match, bonus, or equity. No QBI deduction applies to wages.
Compare against W-2 pay in Pay44Rate by Utilization
Same annual billings, different denominators. Utilization is measured against a 40-hour work week, so 60% means 24 billable hours out of 40.
Notes
Check the Other Side of the Offer
Pay44 handles W-2 paychecks, overtime, deductions, and taxes for all 50 states, so you can hold a salary number next to the rate you just calculated.
Why "Salary Divided by 2,080" Gives You the Wrong Number
Every other Pay44 calculator starts from a rate or an income and tells you what lands in your account. This one runs the arrow backward: you name the take-home you need, and it returns the rate you have to charge to get there. That reverse solve is the whole reason the page exists, because the forward version of the question ("what does $80 an hour pay me?") is not the question a freelancer actually has when a client asks for a number.
The 2,080-hour shortcut fails for four separate reasons, and they compound:
- You only bill 50% to 70% of your hours. Sales calls, proposals, scoping, invoicing, bookkeeping, and learning are real work that no client pays for.
- You pay both halves of FICA. Self-employment tax is 15.3% on 92.35% of net profit, against the 7.65% an employee sees on a pay stub.
- Unpaid time off is genuinely unpaid. Six weeks off is six weeks of zero revenue, not six weeks of paid leave.
- Health insurance, retirement, software, and hardware come out of the same invoice. An employer funds those from a budget you no longer have.
Work one case through. A $75,000 take-home target divided by 2,080 hours is about $36 an hour. Feed the same target into the calculator above with 25 billable hours a week, 6 unpaid weeks off, $6,000 of business expenses, a $7,200 health premium, and $10,000 into a solo 401(k), and the required rate in Texas comes out at about $107 an hour. The gap is not a rounding error. It is the cost of being your own employer.
What Actually Sits Inside a Freelance Hourly Rate
Break one billed hour into its parts and you can see where the money goes. Business expenses come off the top as Schedule C costs. Self-employment tax takes its cut of what is left. Federal and state income tax follow, calculated on adjusted gross income after the deductible half of self-employment tax, the Section 162(l) health insurance deduction, your retirement contribution, the standard deduction, and (if you qualify) the 20% qualified business income deduction. Health premiums and retirement contributions leave your account as cash on top of that. Whatever survives all of it is your take-home. The breakdown card above shows the same seven lines for your own inputs, and they always sum to the annual billings figure.
Your state changes the answer too, sometimes by several dollars an hour. Here is the required rate at 25 billable hours a week and 6 unpaid weeks off (1,150 billable hours a year), single filer, $6,000 of expenses, a $7,200 premium, $10,000 of retirement, QBI applied, in a no-income-tax state and in California:
| Take-home target | Texas rate | Texas billings | California rate | California billings |
|---|---|---|---|---|
| $50,000 | $77.27 | $88,854 | $80.38 | $92,432 |
| $75,000 | $106.61 | $122,597 | $114.27 | $131,403 |
| $100,000 | $137.88 | $158,561 | $149.98 | $172,474 |
| $150,000 | $198.41 | $228,169 | $216.99 | $249,528 |
Notice that the rate does not scale linearly with the target. Federal brackets are progressive, so each additional dollar of take-home costs more in billings than the one before it. That is also why dividing by a flat tax percentage, which is what almost every other freelance rate calculator does, produces a number that is too low at the bottom and too high at the top. The calculator above solves for the rate by bisection instead, converging on the billings figure that actually delivers your stated take-home.
Billable Hours, Utilization, and the Number That Sets Your Rate
Utilization is the input people get wrong most often. Forty hours worked is not forty hours billed. A freelancer at 60% utilization bills 24 hours in a 40-hour week; at 80%, 32 hours. The Rate by Utilization table above holds your annual billings constant and changes only the denominator, so you can see what a change in booked work does to the rate you need.
The lesson from that table is usually uncomfortable: raising utilization from 50% to 70% cuts the required rate by nearly 30%, but sustained 70% utilization means a full pipeline, fast client onboarding, and very little unpaid scoping. Most freelancers find it easier to raise the rate than to find eight more billable hours a week. If you also hold a W-2 job, the Side Hustle Take-Home Calculator handles the mixed-income case, and the True Hourly Rate Calculator shows what your existing job really pays per hour after commute and unpaid overtime.
From Hourly Rate to Day Rate, Retainer, and Project Price
Clients rarely buy hours. Convert the floor into the units they do buy. A day rate is eight billable hours at your rate. A weekly retainer is your weekly billable capacity, which is also a sane project minimum: a small engagement still costs you a full slot of sales and onboarding. A fixed project price is your estimated hours at the floor rate, plus a contingency for the parts of the scope nobody has thought about yet.
Two closing points. First, the number this page returns is a floor, not a ceiling. It tells you where the work stops paying for itself; it says nothing about what the work is worth to the client. Price the value on top. Second, review the rate annually. Premiums rise, brackets shift, and existing clients will happily pay last year's number forever if you let them. Once you are billing at the new rate, the Quarterly Estimated Tax Calculator sizes the four payments you will owe, and the Hourly to Salary Calculator converts any rate straight to an annual figure with no tax modeling in the way.
Frequently Asked Questions
Common questions about freelance hourly rate calculator
How much should I charge as a freelancer?
Start from the take-home you need, not from a rate you saw in a forum thread. Add business expenses, self-employment tax, federal and state income tax, health insurance premiums, and retirement contributions on top of that target, then divide the total by the hours you can actually invoice. The calculator above does exactly that in one pass. Whatever number it returns is a floor, the point below which the work stops paying for itself, not the price you should quote.
How do I turn a salary into a freelance hourly rate?
Salary divided by 2,080 gets the wrong answer for three reasons: you do not bill 2,080 hours, you pay both halves of FICA as self-employment tax instead of splitting it with an employer, and nobody funds your health insurance, retirement, or time off but you. The 1.3x to 1.5x rule of thumb you see everywhere is a sanity check on a number you already computed, not a method for computing it. If you want to compare a specific salary offer against a specific contract offer, use our Employee vs Contractor Calculator.
How many hours can a freelancer actually bill in a year?
Most full-time freelancers bill between 1,000 and 1,500 hours a year, which works out to roughly 20 to 30 billable hours inside a 40-hour week. The rest of the week goes to sales calls, scoping, proposals, admin, invoicing, chasing payment, and keeping your skills current. None of that is billable, and all of it has to be paid for by the hours that are.
How much extra do I need to charge for self-employment tax?
Self-employment tax is 15.3% on 92.35% of your net profit: 12.4% Social Security up to the $184,500 wage base in 2026, plus 2.9% Medicare with no cap, plus an extra 0.9% Additional Medicare above $200,000 (single) or $250,000 (married filing jointly). Half of it, excluding the Additional Medicare portion, is deductible against income tax, so the real bite is smaller than the headline rate. Our Self-Employment Tax Calculator shows the full breakdown if you already know your income.
Should my freelance rate be higher than my W-2 hourly rate?
Yes, and by a lot more than most people expect. As an employee your company covers 7.65% of employer-side FICA, a share of your health premium, any retirement match, and every paid holiday and sick day. As a freelancer all of that lands on your invoice, and so does every unbillable hour. The calculator shows the equivalent W-2 salary next to the required billings so you can see the size of the gap for your own inputs.
Do health insurance and retirement belong in my rate?
Yes. A W-2 employer funds those out of the same budget your invoice comes from, so leaving them out means you are quietly working for less than an employee doing the same job. Self-employed health insurance premiums are deductible above the line under Section 162(l), capped at your net profit after the deductible half of self-employment tax and any self-employed retirement contribution, which softens the cost but does not remove it.
What day rate or project minimum matches my hourly rate?
A day rate is eight billable hours at your hourly floor. A sensible project minimum is one week of billable capacity, because a small project still consumes a full slot of sales, onboarding, and context switching. Day rates and fixed fees usually beat hourly billing for delivery work: the client buys an outcome instead of watching a timer, and you keep the upside when you finish early.
Is this the rate I should quote clients?
No. It is your floor, the number below which the work loses money once taxes, expenses, insurance, retirement, and unpaid weeks are covered. Add 10% to 20% on top for slow periods, scope creep, and the fact that existing clients rarely accept a raise as fast as your costs rise. Value and market rates set the ceiling; this page only sets the basement.