How to use the freelance hourly rate calculator
- Keep Freelance rate and Find my rate selected, then type the Take-home income goal per year (after tax) you want.
- Enter the Hours you work per week and your Billable hours per week. The gap is sales, admin and other unpaid time.
- Set Weeks off per year. When you freelance, vacation, holidays and sick days are all unpaid.
- Add your Business expenses per year and a Total tax rate on profit (%).
- Read the Hourly rate to charge. Choose Find my income to see what a rate you already charge would leave after tax.
How the rate is calculated
Tax is owed on profit, which is billings minus expenses, so the calculator works backward from the income you want to keep:
Total billings = income goal ÷ (1 − tax rate) + business expenses
Hourly rate = total billings ÷ (billable hours per week × (52 − weeks off))
In the US, self-employment tax is 15.3%: 12.4% Social Security on the first $184,500 of earnings in 2026 plus 2.9% Medicare, applied to 92.35% of net earnings. Income tax comes on top. See IRS Topic 554.
Worked example with the default numbers
A goal of $80,000, 25 billable of 40 hours a week, 4 weeks off (48 weeks worked), $6,000 of expenses and 25% tax. Profit before tax must be $80,000 ÷ 0.75 = $106,667, so taxes are $26,667 and total billings are $112,667. Billable hours are 25 × 48 = 1,200, so the rate is $93.89 an hour.
Limits and edge cases
- The tax rate is one flat percentage. On $106,667 of profit, a single filer in 2026 owes about $15,072 of self-employment tax (14.1%) and roughly $9,300 to $13,000 of federal income tax, depending on the 20% qualified business income deduction. That is 23% to 26% before state tax, hence the 25% default. Check yours with the self-employment tax calculator or the tax bracket calculator.
- Health insurance, retirement savings, late payments and slow months are not modeled. Add insurance and retirement to your income goal, and round the rate up.
- To project a year of income from a rate you already charge, use the freelance income calculator. For a plain wage conversion, use the hourly to salary calculator.
Freelance rate questions people ask
How do I calculate my freelance hourly rate?
Divide the take-home income you want by one minus your tax rate to get the profit you need, add your business expenses to get total billings, then divide by the billable hours you can work in a year. With an $80,000 goal, $6,000 of expenses, 25% tax and 1,200 billable hours, the rate is $93.89 an hour.
Why is a freelancer's hourly rate higher than an employee's?
An employee is paid for every hour, and the employer covers equipment, paid time off and half of the payroll tax. A freelancer is paid only for billable hours and funds the rest. A salary of $80,000 is $38.46 an hour over 2,080 paid hours, but charging $38.46 with the default numbers would leave you about $30,100 after expenses and tax.
What share of my working hours should be billable?
As a rule of thumb, plan on roughly half to two thirds of your working hours being billable, because finding clients, invoicing and admin are unpaid. The default of 25 billable hours in a 40-hour week is 62.5%. If you are still building a client base, enter a lower number.
How much should a freelancer set aside for taxes?
In the US you owe self-employment tax of 15.3% on 92.35% of net earnings, about 14.13% of profit, plus federal income tax and any state tax. The default here is 25% of profit. Raise it if you live in a state with income tax or earn more, and check your own number with the self-employment tax calculator.
Sources: IRS Topic 554, Self-employment tax; IRS 2026 tax inflation adjustments; SSA Contribution and Benefit Base. Tax figures are for 2026.