Freelance Rate Calculator: Hourly & Day Rate

Why your old salary divided by 2,080 is the wrong rate

The classic mistake: you earned $80,000 as an employee, 80,000 ÷ 2,080 hours is about $38, so you charge $40 an hour. Six months later you are working more and banking less. That shortcut ignores three things an employer quietly paid for: half of your Social Security and Medicare tax, your benefits and equipment, and every hour you were paid but not producing, including meetings, holidays, and vacation.

Freelancers get none of that for free. The only hours that pay are billable hours, and there are far fewer of them than you think. A realistic freelance rate starts from the income you want and works backwards, which is exactly what this calculator does.

The formula

Step 1, revenue needed: take-home target ÷ (1 − effective tax rate), plus business expenses, plus health and retirement costs. Taxes apply to profit, not to money you spend on the business, so only the take-home portion is grossed up.

Step 2, add a buffer: multiply by 1 plus your profit buffer. Ten percent covers a slow month or a client who pays 60 days late. New freelancers should consider 15 to 20 percent.

Step 3, billable hours: (52 − weeks off) × hours per week × billable share.

Step 4, hourly rate: revenue ÷ billable hours. Day rate is the hourly rate times your working hours per day.

Worked example with the default numbers

You want $75,000 in your pocket after taxes. At a 30 percent effective rate, that needs $75,000 ÷ 0.70 = $107,142.86 of profit. Add $12,000 of expenses and $6,000 for health insurance and retirement: $125,142.86. That is your break-even revenue. Add a 10 percent buffer and the target is $137,657.14.

Now the time. Six weeks off leaves 46 working weeks. At 40 hours a week that is 1,840 hours, but only 65 percent are billable, so you have 1,196 hours to sell. $137,657.14 ÷ 1,196 = $115.10 an hour, which rounds to a $120 quote. The break-even rate with no buffer is $104.63. Notice how far that is from the $38 salary math.

Choosing a realistic tax rate

US freelancers pay self-employment tax of 15.3 percent (12.4 percent Social Security plus 2.9 percent Medicare) on 92.35 percent of net earnings, which works out to about 14.1 percent of profit. The Social Security part stops at the annual wage base, $184,500 for 2026. On top of that comes federal income tax and, in most states, state income tax.

For a single filer netting $80,000 to $150,000, a combined effective rate of 25 to 35 percent is a sensible planning number. Half of SE tax, health insurance premiums, and retirement contributions are deductible, which pulls the real rate down. Use the self-employment tax calculator for a precise SE figure, and pay quarterly estimated taxes so April is not a disaster.

Billable share is the number that makes or breaks you

Most solo freelancers bill 50 to 70 percent of their working hours. The rest goes to proposals, invoicing, bookkeeping, client email, learning, and chasing leads. If you enter 100 percent here, the calculator will happily give you a rate that leaves you broke.

Test the sensitivity. With the defaults, dropping billable share from 65 to 50 percent pushes the rate from $115 to about $150. That single assumption matters more than a few thousand dollars of expenses. Track your actual billable hours for a month and use the real number.

Hourly, day rate, or project price

The hourly rate is your floor, not necessarily your pricing model. Day rates reduce the admin of tracking minutes and suit on-site or workshop work. Project pricing lets you capture value when you are fast: estimate hours, multiply by your rate, add 15 to 25 percent for scope risk, and quote a fixed fee.

Whatever the model, never quote below the break-even rate. If the market in your niche will not pay it, the fix is fewer expenses, more billable time, or a different niche, not a lower price. Once work comes in, the invoice total calculator builds the bill and the profit margin calculator shows what each project really earned.