Enter your take-home goal. We figure the rate you actually need to charge, after self-employment tax, health insurance, retirement, and business expenses.
Last reviewed May 2026
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Let's lay it out on the table, man. If you're pricing your freelance gigs by taking a standard corporate salary and just dividing it by 2,080 hours, you are accidentally ripping yourself off. You're probably underpricing your worth by a solid 30 to 50 percent.
Why? Because the standard 9-to-5 world hides the real costs. Corporate employees are insulated with health insurance, paid vacation, 401(k) matches, and a boss who splits the payroll taxes. Out here in the freelance wild, you are footing that entire bill.
When you ignore those hidden costs, the bureaucratic red tape (the self-employment taxes, the bloated insurance premiums, the overhead) eats your profit alive. You end up burning out, missing your retirement savings, and wondering why "being your own boss" feels like working for a cheapskate. Don't let the system hustle you.
It's time to flip the script. Instead of guessing what to charge, this freelance rate calculator works backward. You tell it the actual take-home cash you need to live your life. We run the heavy-duty math, cut through the BS, and hand you the exact, no-nonsense hourly rate you actually need to charge to thrive.
Let's figure the math, so you can keep the cash.
The 2,080-hour math (40 hours per week times 52 weeks) is what people do when they have a regular job. It assumes you work every week, get paid for every hour, and somebody else covers your health insurance, retirement match, and half your Social Security tax.
As a freelancer, none of that is true. Here is what actually comes out of every invoice you send.
Employees split payroll tax with their employer: the employee pays 7.65 percent and the employer pays 7.65 percent. Freelancers pay both halves. 15.3 percent total, called self-employment tax. This applies to every dollar of net business income up to the Social Security wage base ($184,500 in 2026), and the Medicare portion (2.9 percent) keeps going above that.
This is on top of self-employment tax. Federal runs 10 to 37 percent by bracket. State runs 0 to 13 percent depending on where you live. A full-time freelancer pulling in $100,000 gross might pay 25 to 35 percent of that in combined income tax, stacked on top of the 15.3 percent SE tax.
An employee gets a subsidized plan through work. A freelancer buys one on the marketplace or through a spouse. A single-adult silver plan averages $400 to $700 per month depending on state and age. Families pay more. This is real money that comes out of the same hourly rate.
Employers typically match 3 to 6 percent of salary into a 401(k). Freelancers self-fund. Industry guidance is to save 15 to 20 percent of gross for retirement. If your rate does not include that, you are borrowing from future-you to fund current-you.
Software subscriptions, accounting, phone, internet, home office, professional liability insurance, continuing education, conferences. A solo freelancer runs $300 to $1,000 per month on baseline business expenses, higher in some fields.
Use the calculator above to work backward from your take-home goal. Then hold that number when you quote rates. Clients who cannot pay your real rate are not your clients. They are just your unpaid loans.
Here's the next trick the system plays on you. Once your freelance net profit clears somewhere around $60,000 to $80,000 a year, you are probably paying more self-employment tax than you need to. A lot more. Like thousands of dollars a year more.
The move is called an S-Corp election. You form an LLC, then file a form with the IRS that changes how the LLC gets taxed. Instead of every dollar of profit getting slapped with the 15.3 percent self-employment tax, you pay yourself a "reasonable salary" out of the business. Only that salary gets hit with payroll tax. The rest of the profit flows through as distributions, which are not subject to self-employment tax.
Quick sketch of the savings. Take a freelancer netting $120,000. As a plain sole proprietor or single-member LLC, all $120,000 gets hit with 15.3 percent SE tax, which is roughly $18,360. Elect S-Corp, pay yourself a $70,000 reasonable salary, and now only that $70,000 gets payroll tax (~$10,710). The remaining $50,000 in distributions skips SE tax entirely. Back-of-napkin savings: around $7,000 a year, minus the cost of running the S-Corp (payroll provider, extra tax return, possibly a bookkeeper). Net savings for most people in this range: $3,000 to $5,000 per year.
The default scenario (single filer, $75,000 target take-home, 28 billable hours/week, 48 weeks/year, $500/month health insurance, 15% retirement savings, $500/month expenses) computes to $108.24 per hour. Here is where that number actually comes from: the calculator needs $145,477 of gross revenue to hand you $75,000 after everything, split as $20,555 in self-employment tax, $16,113 in federal income tax, $21,821 diverted to retirement, $6,000 to health insurance, and $6,000 to business expenses. Divide $145,477 by 1,344 billable hours (28 hours times 48 weeks) and you land on $108.24.
Switch only the filing status to married filing jointly and the rate drops to $99.95 per hour, about $8 less. The mechanism is the higher MFJ standard deduction ($32,200 versus $16,100 single) and wider bracket thresholds, both of which shrink the federal tax bill even though nothing else about the freelancer's business changed. Filing status alone moves the number more than most single input field does.
A smaller target changes things proportionally less than you might expect. A $60,000 take-home goal at 30 hours/week, 48 weeks/year, with 10% retirement savings and $250/month expenses comes to $72.51 per hour, not simply 80% of the $75K scenario's rate, because self-employment tax and the standard deduction do not scale linearly with income.
Run the same math on a $100,000 take-home goal at 25 hours/week over 46 weeks (a common structure for freelancers who work fewer, higher-value hours), single filer, and the required rate is $167.87 per hour against $193,046 of gross revenue. The billable-hours denominator shrinks to 1,150 hours a year, so even though the target take-home is 33% higher than the default scenario, the hourly rate is 55% higher, because there are fewer hours to spread the fixed costs and the growing tax bill across.
The results panel discloses this directly: "State income tax: not included, add 0 to 13% depending on your state." That range is real but wide. Nine states (Florida, Texas, Tennessee, Washington, Nevada, Wyoming, South Dakota, Alaska, and New Hampshire on wage income) charge no state income tax at all, so a freelancer there pays exactly what this calculator shows. California's top marginal rate is 13.3% on income over $1 million, but most freelancers land in California's middle brackets, more commonly 9.3% to 10.3% (source: Tax Foundation, 2026 State Income Tax Rates). On the default $145,477 gross scenario, even a mid-range 9% effective state rate on the taxable portion adds roughly $8,000 to $10,000 a year in tax the calculator does not show, which raises the true required rate by $6 to $7 per hour for a California resident compared to a Texas resident with otherwise identical numbers.
The 15% default multiplies your gross revenue directly, with no cap. A freelancer with a high gross figure could compute a retirement contribution that exceeds actual IRS limits for a SEP-IRA or Solo 401k. If your calculated retirement dollar amount is large, check it against your specific account type's annual contribution limit before treating the full amount as deductible or contributable.
A freelance rate calculator works backward from your take-home income goal to figure out the hourly rate you need to charge. It accounts for self-employment tax, income tax, health insurance, retirement, and business expenses. The things employees do not have to think about because employers cover them.
A common planning assumption is 30 to 35 percent combined (self-employment + federal + state). If you live in a state with no income tax (Texas, Florida, Tennessee, and others), you are on the low end. If you live in California or New York, expect the high end. Talk to a CPA for your actual number. This calculator is a starting point, not a tax return.
25 to 30. That leaves 10 to 15 hours per week for admin, sales, proposals, unpaid revisions, and invoicing. If you plan for 40 billable hours you will almost certainly come up short. If you plan for 20 you are leaving money on the table. The calculator lets you tune this based on your reality.
No. This is a calculator. The default values are directional not prescriptive. Tax outcomes depend on your specific situation, filing status, state, and deductions. Consult a licensed CPA or tax professional before making decisions based on these numbers.
Yes. Employees get an employer 401(k) match; freelancers get nothing unless they build it into what they charge. Industry guidance points to 15 to 20 percent of gross revenue as a reasonable floor for self-funded retirement savings, which this calculator uses as its default. Skipping this line item does not make the need go away, it just means future-you inherits a bill that today's rate never covered.
Once net profit clears roughly $60,000 to $80,000 a year, the payroll-tax savings from an S-corp election typically start to outweigh the added cost of running one (payroll processing, a separate business return, and the requirement to pay yourself a defensible "reasonable salary"). Below that range, the extra administrative cost usually eats most or all of the tax savings. See the S-Corp section above for a worked comparison at $120,000 net profit.
Disclaimer. This article is for educational purposes only and does not constitute legal, tax, accounting, or financial advice. We provide calculators and informational content, not legal or accounting services. Tax outcomes depend on your individual circumstances. Consult a qualified attorney, CPA, or tax professional for advice specific to your situation.