1. Enter your target take-home income for the year and your business costs, choosing whether the costs are per week, month or year.
2. Enter your hours per week, the billable share of those hours and your weeks off. Choose whether to include US self-employment tax, and optionally add an income tax set-aside and a safety buffer.
3. Read the minimum hourly rate, then add your current rate to see whether it covers the target.

Here is what each result means:

A freelancer hourly rate is the price charged for each hour of client work. A sustainable rate is not a salary divided by 2,080 hours; it must also pay for the business, the taxes an employer would normally share, and the hours that cannot be billed.

An employee is paid for vacation, holidays and admin time. A freelancer is paid only for billable hours, so those hours carry the whole year. The rate from this calculator is a floor: the minimum that meets your goal. Market demand, your experience and the value of the work decide how far above that floor you can price.

The rate is also the base for other pricing. Day rates, weekly retainers and fixed project quotes all start from an hourly figure multiplied by the time a job really takes.

It works backwards from your take-home goal to the revenue you must bill, then divides that revenue by your billable hours.

1. Gross up for income tax. An optional set-aside of t percent raises the amount needed: take-home / (1 - t).
2. Gross up for US self-employment tax. The IRS applies SE tax to 92.35% of net earnings at 15.3%: 12.4% for Social Security and 2.9% for Medicare. Below the cap, that is 14.13% of net earnings, so net earnings needed = amount / 0.8587. The 12.4% part stops at the Social Security wage base, $184,500 for 2026.
3. Add business costs. Costs are converted to a yearly figure and added to net earnings. A buffer, if entered, is added on top.
4. Divide by billable hours. The result is the minimum rate per billable hour.

Suppose a US freelancer wants $60,000 of take-home income, has $500 a month of business costs, works 40 hours a week, can bill 65% of them and takes 6 weeks off.

Costs: 500 x 12 = $6,000 a year. Net earnings needed: 60,000 / 0.8587045 = $69,872.70. SE tax: 69,872.70 x 92.35% x 15.3% = $9,872.70. Revenue needed: 6,000 + 69,872.70 = $75,872.70.

Billable hours: 40 x 65% x 46 weeks = 1,196. Rate: 75,872.70 / 1,196 = $63.44 per hour, or a day rate of about $329.88.

A current rate of $55 is 86.7% of that figure, so this freelancer is about $8.44 an hour short. Leaving SE tax out, as someone outside the US might, the same inputs give $55.18 an hour. Income tax is not included in either figure unless you add a set-aside.

Billable hours move the rate more than any other input, because every cost and tax is spread over them.

Billable Share

With the example inputs, billing 100% of 40 hours gives $41.24 an hour, while billing 65% gives $63.44. Time spent on sales, invoices, email and learning is real work that clients do not pay for directly.

Weeks Off

Vacation, public holidays and sick days all remove billable weeks. Taking 0 weeks off in the example lowers the rate to $56.12, but few people work every week of the year.

Taxes

US SE tax adds about 16.5% on top of take-home at typical incomes (1 / 0.8587). Income tax depends on your whole situation, so it is a set-aside you choose, not a figure the tool works out. The salary calculator helps compare against an employed role.

Business Costs

Software, hardware, insurance, workspace, payment fees and professional fees all come out of revenue before you are paid. Health insurance and retirement saving are costs an employer might cover; include them in costs or in your target income.

A freelance hourly rate and an employee hourly wage are not directly comparable, because the freelancer carries costs and unpaid time that an employer covers.

This is why a freelance rate is often well above the hourly wage for the same skill. The markup calculator shows the same idea from the pricing side: a price has to cover cost before it earns anything.

Setting a First Rate

Start from the minimum rate, then compare it with what clients in your field pay. If the market rate is below your floor, the plan needs fewer costs, more billable hours or a different offer.

Reviewing an Existing Rate

Enter your current rate each year when costs, taxes or time off change. The verdict shows whether the rate still covers your goal.

Quoting a Project

Multiply the rate by a realistic estimate of hours, including revisions and meetings, to build a fixed quote. The break-even calculator helps check how many projects cover a year of costs.

1. Dividing a Salary by 2,080 Hours

That assumes every working hour is billable and every week is worked. Most freelancers bill well under that.

2. Forgetting Self-employment Tax

A US freelancer pays both halves of Social Security and Medicare. Leaving it out understates the rate by about 14 percent of net earnings.

3. Treating Revenue as Income

Money billed is not money kept. Costs and taxes come out first, which is why the tool works backwards from take-home income.

4. Leaving Out Time Off

Holidays and sick days are unpaid for a freelancer. Plan for them in the rate rather than hoping to work every week.

5. Using the Minimum as the Price

The minimum only covers the plan. A buffer protects against slow months, late payments and lost clients.

The arithmetic is exact for the figures entered, but taxes are simplified, so treat the rate as an educational estimate.

The IRS sets it at 15.3%: 12.4% for Social Security and 2.9% for Medicare. It applies to 92.35% of net earnings, and the 12.4% part stops at the Social Security wage base, $184,500 for 2026.

US self-employment tax generally applies once net earnings from self-employment reach $400 or more, according to the IRS. The calculator leaves SE tax out below that level.

It depends on your week and time off. At 40 hours a week, 65% billable and 6 weeks off, the total is 1,196 hours, far below the 2,080 hours of a full-time job.

Yes, if your take-home target is after all tax. Enter your own estimate as the income tax set-aside. The tool does not work out income tax, because it depends on your deductions, filing status and location.

Yes. Choose Do not include for SE tax, and use the income tax set-aside and costs to reflect local taxes. The currency switch changes the symbol only.

Multiply the rate by the billable hours in a working day. The tool shows a day rate for a 5-day week, based on your weekly hours and billable share.

Because you now pay the whole SE tax, your own costs and your own unpaid time off. Those costs are spread over fewer paid hours than an employee has.

Review it at least once a year and whenever costs, hours or the wage base change. Enter your current rate to see whether it still covers your goal.

Many US freelancers do. The IRS says individuals generally must make estimated tax payments if they expect to owe $1,000 or more when they file.

No. The calculation runs entirely in your browser. Nothing is sent to our servers, and anything you choose to Save stays in this browser only.

• Self-employment tax: 15.3% rate and its parts (Internal Revenue Service).
• Topic no. 554, Self-employment tax: the 92.35% rule and $400 threshold (Internal Revenue Service).
• Contribution and benefit base: $184,500 for 2026 (Social Security Administration).
• Estimated taxes for self-employed people (Internal Revenue Service).