Pricing · 2026
Freelance Hourly Rate Calculator
Most freelancers set a rate by halving a salary and dividing by 2,080 hours. That produces a number that cannot work, because you do not bill every hour and you pay both halves of FICA. This works backward from what you actually need to keep.
Software, hardware, insurance, accounting, coworking, marketing.
Federal, state, and self-employment tax combined.
Sales, admin, and invoicing are not billable. 60% is realistic; 80% is optimistic.
- Equivalent day rate (8h)
- $992.75
- Gross revenue required
- $137,000
- Billable hours per year
- 1,104
- Unbillable hours per year
- 736
- Naive rate (salary ÷ 2,080)
- $43.27
- What the naive rate would cost you
- $89,231
Transparent method
How this calculator works
- Convert the desired take-home amount into required pre-tax profit using the entered effective tax rate.
- Add annual business expenses to find required revenue.
- Divide revenue by realistic billable hours after time off and nonbillable work.
What the result does not include
- The effective tax rate is an input, not a tax-return calculation.
- Health insurance, retirement savings, profit buffer, and market positioning should be included in the inputs or added to the result.
Common questions
Why is the calculated rate so much higher than a salary equivalent?
Three reasons stack. You pay both halves of FICA instead of one. You bill roughly 60% of your hours instead of being paid for 100%. And you fund your own time off, health insurance, equipment, and retirement. A $90,000 salary is not a $45/hour freelance rate.
What billable percentage is realistic?
Established freelancers with steady referral work land around 60–70%. Anyone still doing active outbound sales runs closer to 50%. Assuming 80% or more is how rate calculations quietly fail — you end up working more hours for the income you planned.
Should I charge hourly at all?
Use this number as your floor, then price by project or value where you can. Hourly billing caps your income at your capacity and penalizes you for getting faster. But you still need this figure to know whether a fixed price is profitable.