Freelance Hourly Rate Calculator
Start with the money you want to live on. Work backwards through tax, expenses and the hours nobody pays you for, and land on the rate to quote.
- Take-home $70,000
- Costs & savings $20,000
- SE tax $14,587
- Income tax $6,653
- State $0
| Gross you need to invoice | $111,240 |
| Total tax | $21,240 |
The number most freelancers get wrong: billable hours
A 40-hour week across 46 weeks is 1,840 hours. At 65% billable, only about 1,200 of them earn money. The other hours go to proposals, emails, bookkeeping and learning, and your rate has to pay for them. Drop the billable share to 50% and the rate you need jumps by about 30%.
Once you have a rate, compare it against a salaried offer with the 1099 vs W-2 calculator, then use the set-aside calculator to know what part of each invoice to park.
Questions freelancers ask
How do I calculate my freelance hourly rate?
Start from the take-home income you want, add business expenses, health insurance, retirement savings and taxes to get the gross you need, then divide by the hours you can realistically bill in a year, not the hours you work.
How many billable hours does a freelancer have per year?
Far fewer than 2,080. After vacation, holidays, sick days and the 25–40% of working time spent on sales, admin and invoicing, 1,000–1,500 billable hours is typical for full-time freelancers.
How do I convert a salary to a contractor hourly rate?
A rough rule is salary ÷ 1,000 for a contract rate that covers self-employment tax, benefits and unbilled time (so $90,000 → about $90/hour). The calculator on this page and the 1099 vs W-2 calculator give a precise figure for your situation.