Freelance Rate Calculator
Find your minimum hourly rate that covers taxes, expenses, and your income goals - with self-employment tax built in.
How It Breaks Down
| Desired Take-Home | $0 |
| + Estimated SE Tax (15.3%) | $0 |
| + Estimated Federal Tax | $0 |
| + Business Expenses | $0 |
| = Minimum Gross Needed | $0 |
| + Profit Margin | $0 |
| Target Annual Gross | $0 |
| Billable Hours/Year | 0 |
How to Set Your Freelance Rate
One of the biggest mistakes new freelancers make is pricing themselves like an employee. If you earned $25/hour at a full-time job, charging $25/hour as a freelancer means you'll actually take home far less - because you're now responsible for self-employment tax, health insurance, equipment, and all the unbillable time spent on marketing and admin.
The Freelance Rate Formula
Your freelance rate needs to cover four things:
- Your desired income - what you want to actually take home
- Self-employment taxes - 15.3% for Social Security and Medicare, plus federal and state income tax
- Business expenses - software, equipment, insurance, home office, professional development
- Profit margin - a buffer for slow months, growth investment, and retirement savings
Our calculator builds all four into your rate so you hit your income goals without surprises at tax time.
Why Self-Employment Tax Matters for Your Rate
As a W-2 employee, your employer pays half of your Social Security and Medicare taxes (7.65%). As a freelancer, you pay both halves - 15.3% total. On $60,000 of freelance income, that's about $8,478 in self-employment tax alone, before any income tax.
Most freelance rate calculators ignore this. Ours doesn't. That's why your calculated rate here might be higher than you expected - but it's the rate you actually need to charge to hit your income goals.
Billable vs. Total Hours
If you work 40 hours a week as a freelancer, you won't bill all 40. Expect to spend 25-35% of your time on non-billable work: finding clients, writing proposals, invoicing, bookkeeping, marketing, and professional development. That's why our calculator asks for billable hours specifically.
A realistic breakdown for a 40-hour freelance week:
- 25-30 hours: Billable client work
- 5-8 hours: Marketing, proposals, networking
- 3-5 hours: Admin, invoicing, bookkeeping
- 2-3 hours: Learning, professional development
When to Raise Your Rate
If you're booking more than 80% of your available hours, you're undercharging. Raise your rate 10-20% for new clients and see if demand holds. The best time to raise rates is when you're busy enough to afford losing a client or two who can't pay the higher rate.