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- Your rate has to cover taxes, business costs, time off and unbilled hours, not just the pay you want to take home.
- Most freelancers can bill only part of their working week. Admin, sales, invoicing and learning take the rest, so 60–75% billable is common.
- US freelancers pay 15.3% self-employment tax on top of income tax. UK sole traders pay Class 4 National Insurance on profits on top of income tax.
- There’s no employer paying for health insurance, retirement or paid vacation, so those come out of your rate too.
How to use the freelance rate calculator
Choose where you work
Pick United States or United Kingdom. This sets typical tax rates and the currency.
Enter the take-home pay you want
The amount you want to keep each year after taxes and business costs, the same way you’d think about a salary.
Add your hours and time off
Enter the hours you work in a normal week and the weeks you take off for vacation, holidays and sick days.
Set your billable share
The percentage of your working hours you can actually charge clients for. Be honest here; it has the biggest effect on your rate.
Add costs, taxes and retirement
Enter monthly business expenses, and open the advanced options to adjust health insurance, retirement savings and tax rates.
You’ll get your minimum hourly rate, a day rate, the monthly and yearly revenue you need, and a breakdown of where that money goes.
The freelance hourly rate formula
How the calculator works it out
Billable hours = hours per week × (52 − weeks off) × billable %
Profit needed = (take-home pay + retirement savings) ÷ (1 − combined tax rate)
Revenue needed = profit needed + business expenses + health insurance
Minimum hourly rate = revenue needed ÷ billable hours
This is a simplified model that uses flat average tax rates. Deductions and allowances usually make your real tax bill a little lower.
Worked example: $75,000 take-home in the US
A US freelancer who wants to take home $75,000
They work 40 hours a week, take 4 weeks off, bill 65% of their time, spend $300 a month on business costs and $450 on health insurance, save 10% for retirement and use a 15.3% self-employment tax rate plus an 18% average income tax rate.
Their day rate is about $851 and they need to bill around $11,057 a month. Compare that with the $36 an hour that a $75,000 salary works out to for an employee.
Why freelancers charge more than employees
- You pay both halves of payroll tax. An employer pays half of Social Security and Medicare for staff; freelancers pay all 15.3% themselves.
- No paid time off. Every vacation day, public holiday and sick day is a day without income.
- No benefits. Health insurance, retirement contributions and equipment all come out of your own pocket.
- Unbilled time. Finding clients, writing proposals, invoicing and admin are all part of the job, but nobody pays for those hours.
- Gaps between projects. Few freelancers are fully booked all year, so the rate has to carry the quiet months.
Hourly, day or project rates?
Hourly rate
Simple and fair for open-ended work, but your income is capped by your hours, and getting faster means earning less.
Day rate
Common for consultants and creative work in the UK and US. Fewer small invoices and less time tracking.
Project price
Quote a fixed price based on your hourly rate times the hours you expect, plus a buffer. You keep the upside when you work efficiently.
Retainer
A monthly fee for an agreed amount of work. It smooths out your income and makes planning easier.
How to raise your freelance rates
Raise rates for new clients first
Quote your new rate to every new client and move existing clients over with notice.
Specialize
A clear niche makes it easier to charge more than generalists who compete on price.
Show results
Case studies with numbers, such as revenue gained or hours saved, justify higher prices.
Review once a year
Costs and taxes go up every year. Recalculate your minimum rate annually and adjust.
Planning your year? Count your billable days with the working days calculator, add up hours with the time duration calculator, or check tax and margin percentages with the percentage calculator.
Freelance rate calculator FAQ
How do I calculate my freelance hourly rate?
Add the take-home pay you want, your yearly business costs and your taxes to get the revenue you need. Then divide by the hours you can actually bill in a year, not the hours you work.
What percentage of my time is billable?
Most freelancers bill between 60% and 75% of their working hours. New freelancers who spend a lot of time finding clients may bill less than 50%.
How much tax do freelancers pay in the US?
US freelancers pay 15.3% self-employment tax on most of their net earnings, plus federal income tax and, in most states, state income tax. Many set aside 25–35% of profit for taxes and pay estimated tax quarterly.
How much tax do freelancers pay in the UK?
UK sole traders pay income tax on profits above the personal allowance, plus Class 4 National Insurance on profits above the lower threshold. Tax is paid through Self Assessment, usually with payments on account.
Should I charge the same rate to every client?
Many freelancers have one base rate and charge more for rush jobs, small one-off tasks or clients that need a lot of extra communication.
How do I convert a salary into a freelance rate?
Enter the salary as your take-home goal and add the benefits you’d lose, such as health insurance and retirement matching. The result is usually 2 to 3 times the salary divided by 2,080 hours.