Freelance Rate Calculator

Convert hourly ↔ annual, calculate day rates, estimate project margins, and see your true take-home after taxes and expenses. Know exactly what to charge.

Inputs
Work Schedule
hrs/wk
wks/yr
Billable Utilization Rate
10% 70% 100%
% of working hours actually billed to clients. 70% is typical — accounts for admin, gaps between projects, and unpaid work.
Your Hourly Rate
$ /hr
Tax Settings (US)
Self-employment tax (15.3%) is automatic. Select your income tax bracket.
Monthly Business Expenses
Health Ins. $ /mo
Software $ /mo
Other $ /mo
Retirement % gross
Results — updates in real time
Gross Annual Income
$0
at $100/hr × 1,400 billable hrs/year
Annual Income Breakdown
Gross Annual Income $140,000
Self-Employment Tax (15.3%) −$21,420
Income Tax (est. bracket) −$16,800
Business Expenses −$8,400
Retirement Savings −$7,000
Net Take-Home $86,380
Billable Hours/Year
1,400
After-Tax Hourly
$61.70
Effective Take-Home/hr
$61.70
Monthly Gross
$11,667
Monthly Take-Home
$7,198
Tax + Exp. Rate
38.3%
Income Allocation
Rate Comparison Table
Hourly Annual Gross After-Tax Annual Take-Home/yr Day Rate
Live calculation — all processing is 100% client-side $100/hr → $140,000 gross annually

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Learn More

Guide
Freelance Rate Calculator: How to Set Your Hourly Rate and Actually Make Money
Cost-of-business formula, billable hours reality, overhead you're forgetting, and how to raise rates. ~9 min read.
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For informational purposes only. This tool provides estimates based on standard formulas and general industry practices. It is not financial advice. Actual mortgage terms, interest rates, taxes, insurance, and fees vary by lender and location. Consult a qualified financial advisor and your lender before making any financial decisions.

Freelance Rate FAQ

How do I calculate my freelance hourly rate?
Start with your desired annual take-home income. Add back self-employment taxes (15.3%), income taxes for your bracket, and business expenses (health insurance, software, retirement). Divide the resulting gross annual income by your billable hours (working hours × utilization rate). For example: $80,000 target income ÷ 70% utilization × 1,960 annual working hours = about $58/hour gross before taxes. Factor in taxes and you may need to charge $80–$100/hour to actually take home $80k.
What is the self-employment tax rate?
Self-employment tax in the US is 15.3% on net self-employment income up to the Social Security wage base ($168,600 in 2024). This covers both the employer and employee portions of Social Security (12.4%) and Medicare (2.9%). Above the wage base, only the 2.9% Medicare portion applies. Self-employed individuals can deduct half of the SE tax from their gross income when calculating income taxes.
What is a utilization rate for freelancers?
Utilization rate is the percentage of your working time that is billable to clients. A 100% utilization rate is unrealistic — you'll spend time on admin, marketing, invoicing, professional development, and gaps between projects. Most freelancers realistically bill 60–75% of their working hours. A 70% utilization rate on a 40-hour week means about 28 billable hours per week. This directly impacts your required hourly rate: lower utilization means you must charge more per hour to hit your income goal.
How do I calculate a day rate from an hourly rate?
Multiply your hourly rate by the number of working hours in your day. A standard day rate typically uses 7–8 hours. For example, at $100/hour with an 8-hour day, your day rate is $800. Some contractors use a slightly higher multiplier (8.5–9 hours) to account for downtime within the day. Day rates are common in consulting and agency work where clients prefer a predictable daily cost.
What business expenses should freelancers factor into their rate?
Key freelance business expenses include: health insurance (typically $300–$600/month for an individual), software and tools subscriptions (design, development, productivity tools), retirement contributions (SEP-IRA allows up to 25% of net income), professional development, home office costs, equipment depreciation, accounting and legal fees, and marketing costs. These expenses reduce your take-home pay unless you factor them into your rate.
What is a good project margin for freelancers?
Project margin is the percentage of a project's price that is profit above your time cost. A 20–30% margin is typical for well-scoped projects. Negative margin means you under-bid relative to hours spent. A 0% margin means the project pays exactly your target hourly rate with no buffer. Higher margins (40%+) are achievable on productized services or when you've developed significant efficiency. Use this calculator's Project Margin mode to evaluate bids before committing.
Should I charge more as a freelancer than a salaried employee?
Yes — significantly more. As a freelancer you pay both halves of payroll taxes (15.3% vs. ~7.65% for employees), you pay for your own health insurance, you fund your own retirement, you have no paid vacation, you have gaps between projects, and you spend unpaid time on business development and admin. A common rule of thumb: your hourly freelance rate should be 1.5–2× what you'd earn hourly as a salaried employee to achieve the same net income. Use this calculator to find the exact number for your situation.