Freelance Rate Calculator
Work out the minimum hourly rate you need to charge to reach your income goal. This freelance rate calculator factors in self-employment tax, non-billable time, vacation, and annual overhead so the number you get actually covers your life.
Admin, proposals, emails, marketing, learning
Minimum Billable Rate
| Daily rate (8 hrs): | $0 |
| Weekly (billable): | $0 |
| Monthly equivalent: | $0 |
How to Use This Calculator
Start with your target net annual income. That is the money you want to actually take home after taxes, not your gross. Add your expected annual business expenses: software, equipment, insurance, coworking fees, anything that is a real cost of running your practice.
The SE tax buffer is set to 15.3% by default, which is the US self-employment tax rate as of 2026. Adjust it if your situation differs. Enter your planned vacation and sick days, then your typical non-billable percentage. For most freelancers, 25 to 35 percent of working time goes to admin, sales, and learning. The calculator uses all of this to find the rate you need per billable hour.
How the Freelance Rate Formula Works
The calculation works in three steps.
Step 1: Gross revenue needed
Gross = (Target net income + Annual expenses) / (1 - SE tax rate)
If you want $70,000 net with $5,000 in expenses and 15.3% SE tax: Gross = $75,000 / 0.847 = $88,548.
Step 2: Billable hours per year
Total work hours = weeks per year x hours per week - vacation days x hours per day. Then reduce by non-billable percentage.
Example: 52 weeks x 40 hours = 2,080 hours. Minus 15 vacation days x 8 hours = 2,080 - 120 = 1,960 hours. Billable at 70% = 1,372 hours.
Step 3: Minimum hourly rate
Rate = Gross revenue / Billable hours = $88,548 / 1,372 = $64.54 per hour.
Freelance Rate Scenarios
- Junior designer, $50k net goal, 20% non-billable: Gross needed ~$63k, billable hours ~1,600. Minimum rate: $39/hr. Most designers charge more than this, leaving margin for slow months.
- Senior consultant, $120k net goal, 35% non-billable: Gross needed ~$155k, billable hours ~1,170. Minimum rate: $132/hr. This is why experienced consultants charge $150 to $200 per hour.
- Part-time freelancer, $30k net goal, 20 hours/week: Gross needed ~$39k, billable hours ~650. Minimum rate: $60/hr. Even part-time work requires a higher hourly rate than a salaried job doing the same work.
Frequently Asked Questions
Why is my required rate higher than I expected?
Most freelancers are surprised because they undercount non-billable time. If you bill 40 hours a week but spend 15 of those hours on admin and sales, only 25 are actually generating income. That gap between total hours and billable hours is the biggest reason freelancers underprice themselves early on.
Should I charge the same rate for all clients?
Not necessarily. The minimum rate this calculator shows is your floor, not your ceiling. You can and should charge more for rush projects, complex work, or clients in high-margin industries. The calculation just tells you the lowest you can go without losing money.
What counts as a business expense?
Software subscriptions, professional development courses, home office costs, liability insurance, accounting fees, equipment depreciation, and any direct project costs you cover before billing the client. Keep receipts for everything since these reduce your taxable income.
How does this compare to a full-time salary?
Use our Hourly to Salary Calculator to convert your freelance rate to an annual equivalent. Then factor in that you cover your own health insurance and retirement contributions, which a salaried employer typically pays. The true comparison is often closer than it looks at first.
