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tool / 02 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."
Your numbers
The net amount you want in your pocket after all taxes. This is your personal financial target.
$
Software, equipment, home office, professional development, insurance, accounting. These must come out of your revenue before you pay yourself.
$
52 weeks minus your vacation, sick, and holiday days. A realistic starting point is 46 weeks (6 weeks off). New freelancers often start closer to 48.
Hours you can actually bill a client per week. Out of a 40-hr week, admin, sales, and non-billable time eat roughly 30-40%. Realistic average: 20–28 hrs.
Combined effective rate including SE tax (~14.1%), federal income tax, and state income tax. A common range for US freelancers is 28–38%.
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required hourly rate
$—
per hour
Annual revenue needed
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Total billable hours
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Enter your numbers to see your minimum viable rate.
of gross revenue
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frequently asked
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.