Budgeting & Income
Freelance Hourly Rate Calculator
Most people price freelance work by dividing a salary by 2,080 hours. That number is always too low: it ignores tax you now pay in full, expenses an employer used to cover, and the third of your week that goes to admin you cannot invoice.
Tested against worked examplesHow we verify
Software, insurance, equipment, accounting, coworking — anything the business pays for.
Income tax plus self-employment tax. 25–35% is a common range.
Hours you can actually invoice — rarely more than 60–70% of hours worked.
52 minus holiday, sick days, and gaps between contracts.
Rate you need to charge: $124.29
Rate you need to charge
$124.29
Per billable hour, to clear your target after tax and expenses.
- Equivalent day rate
- $994
- Revenue you must invoice
- $124,286
- Billable hours a year
- 1,000
- Your take-home target
- $80,000
Eight billable hours.
Compare scenariosTry three values of one input
| Take-home pay you want | |||
|---|---|---|---|
| Rate you need to charge | $110.00 | $124.29+$14.29 | $138.57+$28.57 |
| Equivalent day rate | $880 | $994+$114 | $1,109+$229 |
| Revenue you must invoice | $110,000 | $124,286+$14,286 | $138,571+$28,571 |
| Your take-home target | $70,000 | $80,000+$10,000 | $90,000+$20,000 |
Every other input stays at the value you set above — currently $80,000 for take-home pay you want. Differences are measured against the first column.
Saved scenariosSave this calculation
Saved in this browser only — no account, and nothing is sent to us. Clearing your browser data deletes them.
How this calculator works
Required revenue = take-home target ÷ (1 − effective tax rate) + business expenses. The hourly rate divides that by billable hours per week × working weeks; the day rate assumes eight billable hours.
The tax rate is a single blended figure you supply — real liability depends on your structure, state, and deductions. Use our self-employment tax calculator for the FICA portion, and treat this as a pricing floor, not a tax filing.
What this assumes
- Billable hours as entered. Most freelancers bill far fewer hours than they work — admin, sales and unpaid revisions are real.
- Self-employment tax at 15.3% of net earnings, plus income tax, plus the benefits an employer would otherwise fund.
- Unpaid time off is included only if you reduce the billable weeks accordingly.
What changes this number
- Billable ratio
- The most underestimated input. Assuming 40 billable hours a week produces a rate that cannot pay the bills.
- Self-employment tax
- You pay both halves of FICA, which alone requires a materially higher rate than an equivalent salary.
- Benefits you now fund yourself
- Health insurance, retirement and paid leave were part of a salary and are not part of an invoice.
A worked example
Take the $80k take-home, 1,000 billable hours scenario. These figures are produced by the calculator above, not written alongside it, so they always match what the tool returns.
What you enter
- Take-home pay you want
- $80,000
- Annual business expenses
- $10,000
- Billable hours per week
- 25
- Working weeks per year
- 40
What it returns
- Rate you need to charge
- $124.29
- Equivalent day rate
- $994
- Revenue you must invoice
- $124,286
- Billable hours a year
- 1,000
- Your take-home target
- $80,000
Try an example
Frequently asked questions
How do I set my freelance rate?
Start from what you need to take home, add the business expenses an employer used to absorb, gross it up for the tax you now pay in full, then divide by the hours you can genuinely bill. That produces a floor. What the market will pay is a separate question — but you should never price below the floor without knowing it.
Why can't I bill 40 hours a week?
Because selling, invoicing, bookkeeping, proposals, and email are not billable. Most established freelancers bill 20–30 hours in a 40-hour week. Assuming full utilisation is the single most common reason a rate that looked fine leaves someone short at year end.
Is my old salary a fair comparison?
Not directly. A $100,000 salary carries employer payroll taxes, health insurance, paid leave, and equipment on top — often 25–40% more than the headline. Matching that lifestyle as a freelancer usually means invoicing well above the salary figure, not the same amount.
Should I quote hourly or per project?
Quote projects where you can; clients buy outcomes, not hours, and efficiency stops being punished. Use this rate as the internal cost basis: estimate the hours honestly, multiply, then price the proposal on the value delivered rather than showing the arithmetic.
Related calculators
Self-Employment Tax Calculator
Freelancers pay both halves of Social Security and Medicare. Calculate your 2026 self-employment tax, the deductible half, and what to set aside each quarter.
Net to Gross Salary Calculator
Work backward from the take-home pay you want to the gross salary you need, given your effective tax rate. The 'gross-up' calculator for offers and negotiations.
Salary to Hourly Calculator
Convert an annual salary to hourly, weekly, biweekly, and monthly pay — adjusted for your real hours and weeks worked.
Take-Home Pay Calculator
See your actual paycheck after federal tax, Social Security, Medicare, 401(k), health premiums, and state tax — per paycheck and per year (2026 figures).
Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.