Freelance Hourly Rate Calculator (2026)
Start from what you want to keep and work backwards. The answer comes out higher than people expect, because it accounts for the two things rate advice usually skips: the weeks you do not work, and the hours you work but cannot bill.
Rate you need to charge
$102.91
per hour · $823.28 a day · 1,196 billable hours a year
Target ÷ 2,080 hours
$36.06
The calculation most people do. It is short by $66.85 an hour.
Cash in your pocket after tax, insurance and retirement.
Holiday, public holidays, sick days.
Time spent on the business, not just on client work.
Most freelancers land at 60–70%.
Per year, deductible.
Full annual premium.
Solo 401(k) or SEP-IRA, per year.
Where the year goes
What the rate has to cover
If your billable share is different
This is the input that moves the answer most — more than tax, more than expenses.
| Billable | Hours billed | Rate needed |
|---|---|---|
| 50% | 920 | $133.78 |
| 60% | 1,104 | $111.48 |
| 70% | 1,288 | $95.56 |
| 80% | 1,472 | $83.61 |
Calculated in your browser. Nothing you enter is uploaded.
A full-time year is 2,080 hours. You are not going to work all of them, and you are not going to bill all of the ones you do work — which is the whole reason this number is higher than you expected.
How to use this freelance rate calculator
- Enter the take-home you actually want — cash in your pocket, after tax, after insurance premiums, after money set aside for retirement. Not revenue, and not "salary equivalent".
- Set your weeks off. Holiday, public holidays and the days you are ill. A salaried job pays for these; a freelance contract does not, so they have to be priced in.
- Set your billable share. This is the fraction of working hours that end up on an invoice. Sixty to seventy per cent is normal, and it is the input that changes the answer most.
- Add your annual business expenses, health insurance premium and retirement contribution. All three come out of revenue before anything reaches you.
- Compare the headline rate with the crossed-out figure next to it. That crossed-out number is what dividing your target by a full-time year gives you, and it is the reason under-priced freelancers stay under-priced.
The billable-hours problem, which is the whole problem
A full-time year is 2,080 hours. A freelancer does not get 2,080 hours, and the reason is not laziness. Take six weeks out for holiday, public holidays and being unwell and you are down to 1,840 hours of working time. That is before anyone has paid you for anything.
Then the second cut, which is the one people miss entirely. Of the hours you do work, only a fraction end up on an invoice. Writing proposals that do not convert. Scoping calls. Invoicing and chasing the invoices. Bookkeeping. Marketing yourself so there is a next client. The dead time between one contract finishing and the next starting. Freelancers who track this honestly usually find they bill sixty to seventy per cent of their working hours, and the ones who think they bill ninety per cent have simply never measured.
Both cuts compound. At six weeks off and a 65% billable share, 2,080 nominal hours becomes 1,196 invoiced hours — well under half. Every fixed cost you have, and every dollar of tax, has to be recovered across those 1,196 hours rather than across 2,080. That is not a rounding error; it is close to a doubling of the rate you need.
This is also why raising your rate works better than working more hours. The unbillable share does not shrink as you get busier — proposals, invoicing and admin scale roughly with the number of clients, not with your income. Adding hours adds fatigue at a fixed rate of return. Adding rate adds margin to every hour you were already going to work, including the ones you cannot bill for.
The last piece is that the rate has to cover things an employer used to cover silently. Health insurance at the full unsubsidised price. Retirement savings with no match. Equipment, software, liability insurance and an accountant. And self-employment tax at 15.3%, which is both halves of the payroll tax an employee only ever sees half of. None of these are optional, so all of them belong in the rate.
Example
A freelance designer wants $75,000 a year in her pocket after everything. She takes six weeks off across the year, works a 40-hour week, and estimates that 65% of her working hours are billable. She spends $6,000 a year on software, equipment and an accountant, pays $9,600 for her own health insurance, and wants to put $8,000 into a solo 401(k). She files as single and qualifies for the QBI deduction.
| Weeks actually worked | 46 |
|---|---|
| Hours worked | 1,840 |
| Hours she can bill (65%) | 1,196 |
| Hours nobody pays for | 644 |
| Revenue she needs to invoice | $123,080.36 |
| Self-employment tax | −$16,542.93 |
| Federal income tax (after $15,021.78 QBI) | −$7,931.17 |
Required rate: $102.91 an hour, or $823.28 a day — against $36.06 from the naive calculation.
The naive figure of $36.06 comes from dividing $75,000 by 2,080 hours, which is the sum almost everyone does in their head when they are deciding what to charge. It is wrong twice over: it uses hours she will never work, and it forgets that revenue is not take-home. The real answer is $102.91 — nearly three times as much.
Follow the money down from the top. She invoices $123,080.36, spends $6,000 running the business, pays $16,542.93 in self-employment tax and $7,931.17 in federal income tax, buys $9,600 of health insurance and puts $8,000 aside for retirement. What is left is $75,000. Nothing in that chain is avoidable, which is why the rate has to carry all of it.
The QBI deduction is quietly doing a lot of work: $15,021.78 off taxable income. Without it her income tax would be roughly $3,300 higher and the required rate would rise by nearly $3 an hour. It is the one part of the tax code that treats the self-employed better than employees, and it is worth confirming you qualify.
Now change only the billable share. At 50% she needs $133.78 an hour; at 60%, $111.48; at 70%, $95.56; at 80%, $83.61. Nothing else moved — same target, same expenses, same tax. A fifteen-point swing in how much of her time gets invoiced changes the required rate by $50 an hour. No other input on this page comes close.
Which points at the cheapest way to raise your effective income: bill a larger share of the hours you already work. Templated proposals, a deposit that filters out tyre-kickers, invoicing that takes five minutes instead of an hour, and payment terms that do not require chasing. Each of those moves the billable share up a point or two, and each point is worth more than a rate rise you have to justify to a client.
Limits and things to watch for
- Federal tax only. State income tax comes out of the same revenue, so in most states the rate you actually need is higher than the figure shown here.
- It assumes a sole proprietorship or single-member LLC filing a Schedule C. An S-corporation election changes the self-employment tax arithmetic once profit is well into six figures.
- The QBI treatment is the simple under-threshold case. Consulting, legal, health and financial services are specified service businesses and lose the deduction as income rises past the threshold.
- It does not model income that arrives unevenly, unpaid invoices, or a client who never pays at all. A bad-debt allowance of a few per cent is prudent and is not included here.
- The billable share is your estimate, not a measurement. If you have never tracked it, assume it is lower than you think — that is the direction almost everyone is wrong in.
Disclaimer. This calculator is general information, not tax or business advice. It uses published IRS and SSA figures for tax year 2026 and models the ordinary Schedule C case. Your actual position depends on your state, your entity and your circumstances. Confirm with a qualified accountant, and check the sources below if the last-updated date is old.
Frequently asked questions
- What billable percentage should I assume?
- Sixty-five per cent is a reasonable default for an established freelancer with steady work. Fifty per cent is realistic in your first year, or in any year with a long gap between contracts. Above eighty per cent is achievable only with retainer clients and very little business development, and it is not a number to plan on before you have measured it.
- Should I quote hourly, daily, or per project?
- Quote whichever the client is used to, but price all three off the same underlying hourly figure. The day rate here is your hourly rate times a working day, and a project quote should be your honest hour estimate at that rate, plus a margin for the revisions that always appear. Charging by the project does not change what your time costs — it only changes who carries the risk of the estimate being wrong.
- My rate looks far too high for my market. What now?
- Then the market is telling you something, and there are only four levers. Raise the billable share so fewer hours go unpaid. Cut fixed costs. Work more weeks. Or accept a lower take-home. What does not work is quoting a rate the numbers do not support and hoping volume covers it — that is the path that ends in working sixty-hour weeks for less than employment paid.
- Does this include what I should charge for a rush job?
- No. This is your baseline — the rate that makes an ordinary year work. Rush work, weekend work, and anything that displaces another client are priced above it, commonly at 1.25x to 1.5x. The baseline is the floor, not the ceiling.
- How do I raise rates with existing clients?
- Give notice well before the increase takes effect, apply it to new work rather than work in progress, and state the new figure without an apology or a long justification. Clients who leave over a single-digit percentage increase were going to be a problem later anyway. The ones who stay usually say yes faster than you expect.
- Should I include retirement savings in the target, or on top?
- On top, which is how this page treats it. Retirement contributions are entered separately and are subtracted from revenue before your take-home, because they are money you have earned but are not spending. Bundling them into your take-home target is the same as quietly deciding not to save.