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Tool 02 of 07

Freelance Hourly Rate Calculator

Back into the hourly rate you actually need — accounting for taxes, real utilization, and business expenses. Not just "income goal ÷ hours."

How to use this calculator
1

Enter your income goal — the amount you want to take home after all taxes, not gross.

2

Add your business expenses, choose working weeks per year and realistic billable hours per week.

3

The minimum hourly rate updates instantly. This is your floor — charge less and you'll miss your target.

Your numbers

Live results
$

The net amount you want in your pocket after all taxes — your personal financial target.

$

Software, equipment, home office, professional development, insurance, accounting — these come out before you pay yourself.

52 weeks minus vacation, sick, and holidays. A realistic starting point is 46 weeks (6 weeks off).

Hours you can actually bill a client. Admin, sales, and non-billable time eat ~30–40% of a 40-hr week. Realistic: 20–28 hrs.

%

Combined rate including SE tax (~14.1%), federal, and state. Common range for US freelancers: 28–38%.

Required hourly rate
$—
per hour (rounded to nearest $5)
Annual revenue needed
—
Total billable hours
—
Enter your numbers to see your minimum viable rate.
Of gross revenue
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1099 vs W2 Take-Home
See if a salary offer beats freelancing at your rate.
Frequently asked questions
Why should I use billable hours, not total hours?
Not every hour you work can be billed. Business development, admin, bookkeeping, and unavoidable downtime between projects are all non-billable. Using total hours dramatically under-prices your work. A common utilization rate for freelancers is 50–70%.
What counts as a business expense?
Any cost that is ordinary and necessary for your business: software subscriptions, hardware, professional development, home office allocation, professional liability insurance, and accounting/legal fees. Self-employed health insurance is deductible too but handled separately.
Is 30% a realistic total tax rate?
For most US freelancers earning $60k–$120k it is a reasonable effective estimate. SE tax alone is ~14.1%. Add federal income tax (10–22% bracket) and state tax and most people land between 26–38% effective. Higher earners tip toward 38–45%.
How do I know if my rate is competitive?
A useful benchmark: senior individual contributors at US tech companies earn $150–$250k base. The equivalent 1099 rate is $120–$200/hr. Mid-level runs $75–$120/hr. Junior runs $40–$75/hr. Industry and location shift these considerably.