Freelance Hourly Rate Calculator

Find the hourly rate you need to hit your income goal — accounting for taxes, expenses, time off and realistic billable hours.

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Software, hardware, coworking, services

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$
days
days
days
h
%

Buffer for admin, marketing, gaps. Typically 55–70%

Tax handling

Solves for the rate using 2026 U.S. federal tax: self-employment tax (15.3%), income tax brackets, standard deduction and the 20% QBI deduction. Filing status: single.

Required hourly rate
$120.58
covers tax, expenses, insurance & retirement
Billable hours per year
1,138
237 workdays × 8h × 60%
Gross revenue per year
$137,173
at your billable rate
Take-home per year
$100,000
after tax, expenses, insurance & retirement
Monthly revenue
$11,431
gross, before tax
Effective tax rate
24.3%
incl. self-employment tax

How this freelance rate calculator works

This calculator works backwards from your income goal. It takes the money you want to take home, adds your business expenses, health insurance and retirement savings, then divides by your realistic billable hours — adjusted for taxes.

Step 1: Realistic billable hours

Start from 261 weekdays, subtract vacation, holidays and sick days, then apply your billable utilization. A 60% utilization on a 40-hour week yields about 1,250 billable hours per year — most freelancers bill far fewer hours than they work.

Step 2: Tax-adjusted math

The core formula is:

Hourly rate = (income goal + expenses + insurance + retirement) ÷ (1 − tax rate) ÷ billable hours

The Automatic mode goes further: it solves for the exact rate using 2026 U.S. federal tax rules — the 15.3% self-employment tax on 92.35% of net earnings, the half-SE-tax deduction, the 20% QBI deduction, the standard deduction and the seven federal brackets. If you already know your combined tax rate, switch to Manual mode.

Why taxes change your rate

As a freelancer you pay both halves of FICA plus income tax, so a 25% combined rate means your hourly rate must be 33% higher than your target take-home pay implies. Skip this step and you will quietly undercharge by tens of thousands of dollars per year. After setting your rate, use the 1099 tax calculator to check what you will actually owe on that income.

Frequently asked questions

What is a good freelance hourly rate?

Typical freelance rates range from $40/hour for newer freelancers to $150+/hour for experienced consultants. In 2026, a freelancer targeting $100,000 after tax with 1,248 billable hours and $15,000 of expenses needs roughly $118–$123/hour depending on how you treat taxes. Your rate should reflect your niche, experience, location and expenses — this calculator works backwards from your income goal so you don't undercharge.

How many billable hours do freelancers actually work?

Most freelancers bill 1,000–1,500 hours per year. A 40-hour work week includes admin, marketing, invoicing and gaps between projects, so a realistic billable utilization is 55–70% — roughly 1,200–1,450 billable hours from 261 weekdays.

Why does self-employment tax change my rate?

Employees pay 7.65% FICA with their employer matching it. Freelancers pay the full 15.3% self-employment tax on 92.35% of net earnings, plus federal income tax — so your effective tax rate is higher. That's why this calculator divides your goal by (1 − tax rate): at a 25% combined rate you must earn $1.33 for every $1 you take home.

What expenses should I include in my rate?

Include everything deductible: software subscriptions, hardware, coworking space, professional services, payment processing fees, marketing, insurance premiums and any costs you pay to run the business. Freelancers commonly overlook 10–15% of annual revenue in expenses.

Should I use a utilization buffer when setting my rate?

Yes. Assuming 100% billable time is the #1 reason freelancers undercharge. The default 60% utilization buffers for admin, sales, and unbillable weeks. If you're new or in a seasonal niche, use 50–55% to be safe.

More free freelance calculators

1099 Tax CalculatorDay Rate CalculatorProject Profitability Calculator