Freelance Hourly Rate Calculator
Work out the hourly rate you must charge to hit your target take-home income as a freelancer, accounting for billable hours, unpaid vacation weeks, business overhead, and self-employment tax.
Last updated: May 2026
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About this calculator
Freelancers can only bill a fraction of their working hours, pay their own overhead, and owe self-employment tax, so the rate must be grossed up well above a simple salary-divided-by-2080. First, the income you must earn before tax is (desiredAnnualSalary + annualOverhead) / (1 - taxRate / 100), because taxes take a slice off the top and overhead must be funded from revenue. Next, your actual billable capacity is billableHoursPerWeek x (52 - vacationWeeks), since vacation and unpaid weeks remove billable time. Dividing the required pre-tax revenue by billable hours gives the hourly rate. The 52-week year minus unpaid weeks is what makes the rate realistic; using all 2,080 standard hours would badly underprice your time.
How to use
Say you want $80,000 take-home, carry $12,000 of overhead (software, insurance, equipment), face a 25% effective tax rate, bill 25 hours a week, and take 4 unpaid weeks off. Pre-tax revenue needed is ($80,000 + $12,000) / 0.75 = $122,667. Billable hours per year are 25 x (52 - 4) = 1,200. Your required rate is $122,667 / 1,200 = about $102 per hour. Adjust your billable hours or target income to see how the rate shifts.
Frequently asked questions
How do I calculate my freelance hourly rate from a target salary?
Start with the take-home income you want, add your annual business overhead, then divide by one minus your tax rate to find the revenue you must earn before tax. Divide that by your realistic billable hours for the year (weekly billable hours times the number of working weeks after vacation). The result is the rate that actually funds your desired lifestyle, not just your gross salary, which is why it is usually far higher than your old employee hourly wage.
Why is my freelance rate so much higher than my old salaried hourly wage?
As an employee, your employer covered payroll taxes, benefits, paid time off, software, and idle non-billable hours. Freelancers fund all of that themselves from billable hours only. After accounting for unpaid vacation, overhead, and self-employment tax, you typically need to charge two to three times your old hourly wage just to reach the same take-home pay, which this calculator makes explicit.
How many billable hours per week should a freelancer assume?
Most full-time freelancers realistically bill 20 to 30 hours a week, not 40, because the rest goes to sales, admin, invoicing, and learning. Assuming you can bill 40 hours leads to a rate that is too low to sustain the business. Enter a conservative billable figure here so your rate covers the substantial unbillable time every freelance business carries.