# How to calculate your freelance hourly rate in 9 steps

This guide walks you through the Freelance Rate Calculator step by step, so you know what to charge per hour and per day. You need about ten minutes and a few numbers from your everyday business.

## Preparation

- **Take-home goal:** what you want to keep per month after taxes, health insurance and retirement contributions
- **Business expenses:** what you spent last year on software, insurance, accounting, equipment and marketing
- **Other income:** anything you earn besides billing by the hour, such as courses, a W-2 job, rent or a pension
- **Health insurance:** your monthly premiums, if you buy your own coverage
- **Retirement:** what you put into a SEP IRA, Solo 401(k) or similar plan per month
- **Time:** vacation, sick and training days you plan for, and your state’s effective income tax rate

## Step 1: Set your goal

The card **“Your goal”** sets what should reach you in the end.

- **Desired take-home pay per month:** the amount you keep after taxes, health insurance and retirement contributions. It is neither your revenue nor your profit.

- **Filing status:** single or married filing jointly. The brackets, the standard deduction and the Medicare thresholds depend on it.

- **State and local income tax:** your effective rate in percent of profit. Use 0 in states without income tax.

- **QBI deduction:** switch the 20 percent qualified business income deduction on or off. It is an estimate.

## Step 2: Set your time

In the card **“Your time”** you enter how much you can really work and bill.

- **Working days per week** and **hours per working day**, for example 5 days of 8 hours.

- **Vacation, holiday, sick and training days:** count holidays only if they fall on one of your working days.

- **Billable share of your working time:** pitching, proposals, bookkeeping and client calls are not paid. 50 to 70 percent is common.

      Below the fields the calculator shows the result: with the defaults you have 227.7 working days, 1,822 working hours and **1,093 billable hours** per year.

## Step 3: Add business expenses

The card **“Business expenses”** starts with five sample items. Change them, remove them with “×” or add your own with **“+ Add expense”**. Each item has a name, an amount and a period (per month or per year).

      **Which expenses count?** Anything you pay to run the business and that is deductible: software, equipment, insurance, accounting, marketing, coworking space. The calculator adds them to your revenue target and subtracts them from profit before tax.

      Below the list you see the total per year and per month. With the defaults that is $4,400 per year.

## Step 4: Add other income

The card **“Other income”** is optional. If you earn money besides billing by the hour, add as many rows as you like with **“+ Add income”**. Each row has a name, a **type**, an amount and a period. The type decides how the calculator uses the row:

| Type | Examples | Effect |
| --- | --- | --- |
| Own revenue, not billed by the hour | Online course, products, royalties | Counts as business income and is taxed. It lowers the revenue you must earn by the hour and therefore your rate. Costs go under business expenses. |
| W-2 wages | A job, or a spouse when filing jointly | Raises your tax bracket and uses up part of the Social Security wage base. The calculator takes the tax on everything minus the tax on the wages alone as the tax on your freelance profit. With “Of which reaches your account” the row also covers part of your take-home goal. |
| Other taxable income | Rental profit, interest | Raises your tax bracket in the same way, without Social Security effect. |
| Take-home income | Pension, benefits already taxed | Covers part of your take-home goal without any tax effect. |

      Your take-home goal stays your **total need**. Below the card the calculator shows how much of it has to come from your freelance business.

      **Limit:** The calculator does not model credits, dependents or itemized deductions. For W-2 wages, enter the gross amount from your pay stub or W-2, box 1.

## Step 5: Add health insurance and retirement

The card **“Health insurance and retirement”** sets how much of your profit is set aside for you.

- **Health insurance premiums:** what you pay per month for yourself, your spouse and dependents. They count as the self-employed health insurance deduction, which lowers income tax but not self-employment tax.

- **Retirement contributions:** for a SEP IRA, Solo 401(k) or similar plan. They lower your income tax. Annual limits apply (see IRS Publication 560).

- **Other savings:** an emergency fund or brokerage savings. They do not lower your tax.

## Step 6: Set a buffer

The card **“Buffer”** raises the revenue you need by a percentage. It absorbs late payments, discounts and weeks without work. Many freelancers use 5 to 10 percent. With 0 percent you calculate the tightest possible rate.

## Step 7: Read your result

The result is on the right (below the inputs on a phone) and updates with every change.

- **Minimum hourly rate:** the rate you must charge for the take-home pay you want.

- **Day rate:** hourly rate times hours per working day.

- **Revenue needed** per year and the profit before tax that goes with it.

- **Taxes to set aside:** federal income tax, self-employment tax and state tax, per year and per quarter, with the four due dates of estimated payments.

- **Notes** in colored boxes, for example about the Social Security wage base, the QBI threshold or a missing buffer.

- **“Where does your revenue go?”:** bar and table with take-home pay, expenses, taxes, health insurance, retirement and buffer.

- **“How much does utilization matter?”:** the rate you need at 40 to 80 percent billable time.

## Step 8: Check your current rate

Enter your current rate in the field **“Your hourly rate”**. The calculator runs the numbers forward and tells you how much you take home per month and how far that is above or below your goal.

      The check assumes that every billable hour is paid and that you have no buffer. It shows the best case for your rate.

## Step 9: Print, save, reset

- **Print / save as PDF:** the button at the top opens the print dialog. Choose “Save as PDF” there. The result and your assumptions are printed, not the input forms.

- **Save inputs:** downloads a file `Freelance-Rate-Calculator-Backup-YYYY-MM-DD.json` to your device. It contains only your inputs and is handy for comparing scenarios or moving to another device.

- **Load inputs:** opens a file you saved earlier, or drag it onto the page. The calculator checks it and shows a summary. Only “Load” replaces your current inputs.

- **Remember inputs:** only if you agree in the cookie notice (or later under “Cookie settings” in the footer) does your browser keep your inputs for the next visit. Without consent they are lost on reload.

- **Reset:** sets all fields back to the defaults.

## Worked example

With the calculator’s defaults ($5,000 take-home pay per month, single filer, 4% state tax, 5 days of 8 hours, 60% billable, $450 health insurance and $500 retirement per month, no buffer) the minimum rate is **$89.05 per hour** and the day rate $712. The profit needed before tax is $92,933; federal income tax is $5,403, self-employment tax $13,131 and state tax $2,999.

| Item | per month | per year | Share |
| --- | --- | --- | --- |
| Your take-home pay | $5,000 | $60,000 | 61.6% |
| Business expenses | $367 | $4,400 | 4.5% |
| Taxes | $1,794 | $21,533 | 22.1% |
| Health insurance | $450 | $5,400 | 5.5% |
| Retirement contributions | $500 | $6,000 | 6.2% |
| Revenue needed | $8,111 | $97,333 | 100% |

## Other income: examples

The table shows how the minimum hourly rate changes when you add exactly one more source of income to the default values. All numbers come from the calculator itself.

| Scenario | Take-home needed from your business | Revenue from hourly work | Hourly rate |
| --- | --- | --- | --- |
| Default values, no other income | $5,000 | $97,333 | $89.05 |
| + Online course: $500 revenue per month (not billed by the hour) | $5,000 | $91,333 | $83.56 |
| + Pension: $1,000 take-home income per month | $4,000 | $80,947 | $74.06 |
| + Part-time job: $40,000 W-2 wages, of which $2,600 per month reaches your account | $2,400 | $57,728 | $52.81 |

## Special cases

### Married filing jointly

Choose **Married filing jointly** under “Filing status”. Add your spouse’s earnings as a row of type **W-2 wages** (or other taxable income). The calculator then uses the joint brackets and the joint standard deduction, and takes the tax on everything minus the tax on your spouse’s income alone as the tax on your freelance profit.

### You live in a state without income tax

Set **State and local income tax** to 0. If your city levies an income tax, enter its effective rate as the state rate. Federal and self-employment tax are calculated the same everywhere.

### Your profit is high

Above the Social Security wage base ($184,500 in 2026) the 12.4 percent portion stops, which lowers the effective self-employment tax rate. Above $200,000 (single) or $250,000 (joint) the 0.9 percent Additional Medicare Tax applies, and the QBI deduction phases out. The calculator reflects all three; it still ignores special rules for specified service businesses with employees.

### Freelancing next to a job

Add a row of type **W-2 wages** with your gross salary and enter under “Of which reaches your account” what is left per month after withholding. The calculator taxes your freelance profit on top of your wages, uses up the Social Security wage base and subtracts the take-home part from your goal. Your employer’s withholding does not cover the tax on your freelance income, so plan quarterly estimated payments.

### Several income sources

If you combine billing by the hour with courses, products or royalties, add them as **Own revenue, not billed by the hour**. If you plan conservatively, enter only the revenue you are sure of. The calculator then shows how much you have to earn by the hour. If the other revenue already covers your goal, it tells you so.

### Just starting out

At the beginning the billable share is usually lower because finding clients takes a lot of time. Calculate with 40 to 50 percent and a higher buffer. The utilization table shows what every percentage point costs.

## Troubleshooting

### The hourly rate looks unrealistically high.

First check that your goal is really a take-home amount and not the revenue you want. Then check the billable share: the lower it is, the higher the rate must be. The utilization table shows the relationship.

### The result shows a dash instead of a rate.

With your inputs no billable hours are left. Reduce vacation, sick and training days or raise the working days per week.

### My inputs are gone after reloading.

Your browser only stores inputs with your consent. Open “Cookie settings” in the footer, switch on “Remember my inputs for next time” and save the choice. In a private window nothing is kept.

### The tax amount differs from my tax return.

The calculator estimates with the standard deduction and your state rate, and it ignores credits, itemized deductions and other taxes. Use it to price your work and let a tax professional compute the actual tax.

### Loading my backup file is rejected.

The calculator accepts only files it created itself with “Save inputs” (extension .json). A damaged or oversized file, a file from a newer version or a foreign JSON file is rejected with a message. Your current inputs stay unchanged.

### The printout does not show my inputs.

The result and the assumptions are printed. The input forms are hidden for printing. All values you entered are listed in the block “Assumptions and method”.

As of October 2026. Not tax or legal advice.