Freelance Rate Calculator

The three things that make a freelance rate look expensive

A client comparing your rate to a salary is comparing the wrong numbers, and so are you if you set the rate that way. An employer pays for far more than the hours worked: paid leave, sick days, payroll contributions, equipment, software, training, insurance and the empty weeks between projects. Take those away and hand them to the person doing the work, and the hourly figure has to rise substantially just to stand still.

The three that do the most damage are unbillable time, unpaid time off, and self-employment tax. Each one alone is worth twenty or thirty percent on the rate. Together they routinely double it, which is why a $75,000 salary does not correspond to a $36 hourly rate but to something closer to $90.

Billable share is the number people get most wrong

Almost nobody bills 100 percent of their working hours, and very few sustain 80. Pitching, scoping, invoicing, chasing invoices, bookkeeping, updating a portfolio and keeping your skills current are all real work that no client pays for. Sixty to seventy percent is a realistic figure for an established freelancer with steady clients; in a first year, while you are still finding work, it can be closer to forty.

Lowering this field is the fastest way to see why rates that look high are not. At 100 percent billable the arithmetic gives one answer; at 60 percent the same take-home needs a rate two-thirds higher.

Do not forget the tax you never used to see

As an employee, half of your payroll contributions were paid by the employer and never appeared on a payslip. Self-employed, you pay both halves. Combined with income tax, an effective rate of 25 to 35 percent is a reasonable planning assumption in most of the United States, and it should be set aside as it arrives rather than found in April.

Charging by the hour is a floor, not a strategy

The rate this produces is the least you can accept without going backwards. It is not what the work is worth. Pricing by project or by value routinely earns more for the same hours, and it removes the perverse incentive that hourly billing creates, where working faster earns you less. Use this number to know when to say no, and price upwards from it when the work justifies it.

Raising a rate on existing clients

Rates set at the start of a freelance career are usually the lowest ones you will ever charge, and they tend to persist because raising them feels risky. Give notice, raise on a project boundary rather than mid-engagement, and accept that losing the client who pays least is not a bad outcome. The arithmetic above assumes you are actually charging the number, not quietly discounting it.