Financial Tools

Freelance Rate Calculator

Dividing a salary by 2,080 is how freelancers go out of business. You pay both halves of FICA, cover your own benefits, and bill far fewer hours than you work. This runs the arithmetic backwards from what you want to keep.

What you want to keep

Target Take Home (after tax, per year)

Business Expenses (software, insurance, equipment, per year)

Effective Tax Rate (income tax plus self employment tax)

The hours you actually sell

Hours Worked Per Week

Weeks Worked Per Year (after holiday and slow spells)

Unbillable Share (sales, admin, rework)

Values shown are examples. Edit them to match your situation.

See your full report

What You Have To Charge

Hourly Rate	$0
Day Rate	$0
Billable Hours Per Year	$0
Tax On The Way	$0
Monthly Billing Target	$0
Take Home Divided By Hours	$0
Revenue You Must Bill	$0

Save as PDF Copy link Save this version

Everything here stays in your browser. The link carries your inputs inside the address itself, and the PDF is made by your own device.

For illustration only, not financial advice. Results are estimates based on the numbers you enter and do not constitute an offer, rate quote or approval.

Now check what the tax on that actually is.

Self employment tax is both halves of FICA, and it lands under income tax rather than instead of it.

Run the tax

How this is worked out

The calculation runs from the money you want to keep, upward. Profit before tax is take home divided by one minus your effective rate. Revenue is that profit plus business expenses. The rate is revenue divided by billable hours, not by hours worked.

Self employment tax is 15.3% on net earnings, both halves of Social Security and Medicare, and it sits under income tax rather than instead of it (26 U.S.C. 1401). Enter a combined effective rate that reflects both.

Utilisation is the quiet killer. Sales calls, proposals, invoicing, admin and rework are real hours that nobody pays for. A 30% unbillable share means every billable hour has to carry 1.43 hours of work.

Questions people ask

What effective tax rate should I enter?

Federal income tax plus 15.3% self employment tax on net earnings, plus state tax. For most full time freelancers in the United States the combined effective rate lands between 25% and 35%. Run the self employment tax calculator for your own figure and use that.

What is a realistic unbillable share?

Twenty to forty percent for most solo practitioners, and higher in the first year. If you have never measured it, start at 30% and track a month of actual hours.

Should I charge by the hour at all?

Often not. The hourly rate is still the right thing to compute, because it tells you what a fixed price project has to clear. Price the project, check it against the rate.

Do unpaid weeks matter that much?

Yes. Four weeks off, two weeks sick and a slow fortnight is six weeks, more than a tenth of the year, and the rate has to carry it because nobody else will.

Why is my rate so much higher than a salaried equivalent?

Because an employer was paying half of FICA, health cover, paid leave, equipment, software and the hours you spent not producing. That bill did not disappear, it moved to you.

Most Used Calculators

Expense Calculator