Freelance Rate Calculator
PROCalculate my true freelance hourly rate by accounting for taxes, insurance, overhead, and non-billable time. Discover why my sustainable rate is 2-4x higher than expected.
Example Usage
“I’m leaving my $75,000/year job to freelance as a web developer. I estimate $4,000/year in business expenses (software, insurance, equipment). I can realistically bill 25 hours per week. What hourly rate do I need to charge to maintain my current lifestyle? Factor in self-employment taxes.”
How to Use This Skill
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Suggested Customization
| Description | Default | Your Value |
|---|---|---|
| Target net income after taxes and expenses | $50,000 | |
| Total yearly business costs (software, insurance, equipment) | $5,000 | |
| Combined tax burden (federal + state + self-employment) | 35% | |
| Realistic billable hours accounting for non-billable time | 1200 | |
| Desired profit buffer beyond break-even | 20% | |
| Buffer for scope creep and unexpected costs | 1.5 |
Calculate your true freelance hourly rate by accounting for self-employment taxes (15.3% + income tax), business expenses, and realistic billable hours. Most freelancers undercharge by 40-60% because they ignore these hidden costs. This calculator reveals your sustainable rate is typically 2-4x higher than expected.
What You’ll Get
- Accurate hourly rate accounting for ALL costs
- Self-employment tax breakdown
- Salary-to-freelance conversion
- Project pricing with scope protection
- Break-even analysis
- Annual income planning
Research Sources
This skill was built using research from these authoritative sources:
- A Basic Tutorial to Setting Your Freelance Rate Detailed breakdown of tax rates by country and hourly rate calculation methodology
- How to Calculate Your Hourly/Daily Rate Comparison of employee vs freelancer costs, 150% employer burden concept
- Freelance Estimating: How Much Should I Charge Markup strategies, burdened rate concepts, and professional rate guidance
- Tax on Self-Employment Income Seems High Comprehensive explanation of self-employment tax (15.3%) and Social Security/Medicare burden
- Billable Rate vs Hourly Rate Industry multiplier standards (2.5-4.0x) and overhead burden calculations
- What's the Conversion Rate from FTE Salary to Contractor Rate Rule of thumb (2-3x salary), break-even calculations, chargeability metrics
- Can Anyone Explain Hourly Billing to Me Real agency example showing $200 billable rate vs $48 actual pay