Most freelancers price themselves with salary ÷ 2,080 — and quietly lose money doing it. This calculator works backwards from the take-home pay you actually want, grosses it up for taxes, adds your expenses and a buffer, and divides by the hours clients really pay for.
97
What should you really charge per hour?
Your take-home goal, your real tax bite, your expenses, and the hours clients actually pay for — one floor rate that funds all of it, plus a quote check against where you price today.
How it works: your annual revenue target = (target take-home pay ÷ (1 − tax rate) + business expenses) × (1 + profit buffer). Your billable hours = (52 − weeks off) × billable hours per week. Your floor rate = revenue target ÷ billable hours. The naive comparison is simply target income ÷ 2,080 — every hour of the year, billed, untaxed, and expense-free.
How the freelance hourly rate math works
A salary folds taxes, benefits, and paid time off into the employer's side of the ledger. A freelancer has to price every one of those into the hour — because nobody else will.
Grossing up for tax is the step most people skip: $80,000 of take-home pay at a 30% blended rate needs $114,285 of pre-tax earnings before a single expense is paid.
Worked example: $80,000 take-home at 30% tax
1. The revenue target: $80,000 ÷ (1 − 0.30) = $114,285.71 pre-tax. Add $8,000 of expenses → $122,285.71. Add a 10% buffer → $134,514.29 of annual revenue needed.
2. The billable hours: 52 − 4 weeks off = 48 working weeks × 25 billable hours = 1,200 hours a client will ever pay for.
3. The floor: $134,514.29 ÷ 1,200 = $112.10/hr — vs the naive $80,000 ÷ 2,080 = $38.46/hr, a $73.63/hr gap. The naive rate funds barely a third of the target life.
Where this comes in handy
Quoting a new client: the floor is your walk-away number — the ring shows whether your current quote clears it.
Comparing freelance life to a job offer: run the salary through the take-home pay calculator, then price your floor to match or beat it.
Pricing the self-employment tax hit: the 1099 vs W-2 calculator breaks down what contractor status really costs versus an employee deal.
Auditing your current rate: the true hourly rate calculator shows what you actually earn per working hour today — compare it to your floor.
Annual rate reviews: re-run this whenever expenses, taxes, or time off change; a stale rate is a pay cut in disguise.
Moving to project pricing: price projects at floor × estimated hours × a 1.2–1.5 risk factor, so scope creep eats the factor, not your wage.
Divide a target salary by 1,000 for a quick rate: $80,000 → about $80/hr. It works as a rough parity guess because it bakes in roughly double the hourly cost to cover taxes, benefits, and unpaid time. It breaks when your reality is unusual — very high expenses, heavy travel, or far fewer than ~1,200 billable hours. Use the calculator for your actual numbers.
What is the difference between billable and working hours?
Working hours are everything: client work plus proposals, admin, invoicing, marketing, and learning. Billable hours are only the hours a client pays for. Most freelancers bill 15–25 of every 40 working hours. Quoting against working hours is the fastest way to undercharge.
What tax percentage should I use?
Your blended rate: federal income tax (your marginal bracket), state income tax if any, plus the self-employment tax share that replaces an employer's payroll contribution. Many US freelancers land between 25% and 35%. Run the calculator at both ends to see your rate range — and treat the number as planning, not tax advice.
How many weeks off should I budget for?
Count paid vacations, sick days, public holidays, and slow periods where no work comes in. Four weeks is the optimistic minimum; six to eight is realistic for most independent workers. Every extra week off divides your hours and raises your floor.
How often should I raise my freelance rate?
At minimum, annually with inflation — skipping a raise is a real pay cut. Raise sooner when you are booked solid (demand is telling you the price is low), when your skills or portfolio level up, or when expenses grow. Existing clients usually accept a small yearly increase far more easily than a big jump after three frozen years.
Should I price by the hour or by the project?
Use the hourly floor to anchor both. Project pricing earns more when you are fast, but only if you estimate honestly: floor × estimated hours × a 1.2–1.5 risk factor. The factor is where scope creep and revisions live — without it, fixed-price work quietly pays less than hourly.
Learn the method: the free how to set your freelance hourly rate guide walks through the five inputs in depth — why billable hours are not 40 a week, how the salary ÷ 1,000 shortcut works, and how to raise your rate without losing clients.