Freelance Hourly Rate Calculator

US freelancer pricing tool

Freelance Hourly Rate Calculator

Find an hourly rate that covers business expenses, a customizable tax reserve, time away from work, and the hours you can actually bill clients. Then create a starting quote for a project.

1. Income and expenses

Your income goal is the amount you want to keep after the estimated tax reserve, not your business’s revenue.

Desired annual take-home income ($) Personal pay after the tax reserve.

Annual business expenses ($) Software, insurance, equipment, and other overhead.

Estimated tax reserve (% of profit) Your own planning assumption, not an official tax rate.

2. Working time and billable hours

Administration, prospecting, bookkeeping, and marketing often take time you cannot directly bill to clients.

Hours worked per week All work hours, including nonbillable tasks.

Weeks off per year Vacation, holidays, sick time, and planned breaks.

Billable share of work time (%) Example: 60% means 24 billable hours per 40-hour workweek.

Rate cushion (%) Optional markup above the base revenue requirement.

Tip: Your tax reserve is applied to estimated profit (revenue minus business expenses). Real US taxes are more complex. Use your own tax estimate or consult a tax professional; do not treat the default 25% as an IRS rate.

3. Optional project quote

Use the recommended hourly rate to calculate an initial project price.

Estimated billable project hours Expected hours delivering the project.

Additional direct project costs ($) Do not add costs already included in annual overhead.

Project time contingency (%) Allow extra hours for revisions or scope uncertainty.

Your personalized pricing estimate

Suggested hourly rate — Includes your rate cushion

Base hourly rate — Before optional cushion

Billable hours per year — Based on your schedule

Annual revenue target — Includes the rate cushion

Where your revenue goes

At the suggested rate, assuming you bill all planned billable hours.

Business expenses

Tax reserve

Target take-home

Additional take-home from cushion

Annual overhead—

Illustrative annual tax reserve—

Estimated take-home at suggested rate—

Base rate needed to cover overhead alone—

Your available capacity

Working weeks per year—

Total working hours per year—

Client-billable hours per week worked—

Nonbillable hours per year—

Base annual revenue requirement—

Suggested monthly revenue average—

Compare three hourly prices

All scenarios use the same number of billable hours and annual overhead. After-tax amounts use your simplified tax-reserve percentage.

Hourly rate scenarios and estimated annual income
Scenario	Hourly rate	Annual revenue	Estimated annual take-home

Pricing is a starting point, not a promise of bookings or a statement of market rates. Compare it against your skills, competition, and what clients value.

Your starting project quote

Estimated project hours × (1 + time contingency) × suggested hourly rate + additional direct project costs.

Illustrative project quote —

How the freelance hourly rate is calculated

Billable hours per year = hours worked per week × (52 − weeks off) × billable percentage.

Required annual revenue = annual business expenses + [desired after-reserve take-home ÷ (1 − assumed tax-reserve percentage)].

Base hourly rate = required annual revenue ÷ annual billable hours. Suggested rate = base hourly rate × (1 + optional cushion percentage).

The reserve is a user-entered budgeting assumption, not a US federal or state tax calculation. Actual self-employment taxes and estimated payments require consideration of earnings, deductions, filing status, credits, and applicable rules. For IRS guidance, see Estimated Taxes.

Frequently asked questions

Should I charge for 40 hours per week?

Not unless all 40 hours are actually billable. Time spent marketing, preparing proposals, bookkeeping, and managing your business normally reduces the hours available to invoice clients. Adjust the billable share to fit your situation.

Why is the freelance rate higher than an employee hourly wage?

Freelancers may need to cover business overhead, unpaid nonbillable work, time off, benefits, and their own taxes. This tool uses your assumptions rather than applying a universal multiplier to employee wages.

Is the 25% tax reserve an official IRS tax rate?

No. It is only an editable starting assumption. The actual amount owed can differ significantly. Federal income tax, self-employment tax, state taxes, deductions, and credits must be evaluated separately.

How can I convert my hourly rate to a fixed project price?

Estimate your billable project hours, add a time contingency for uncertain scope, multiply by the suggested hourly rate, then add project-specific direct costs not already counted in overhead.

Does the calculator store my income information?

This calculator performs the math in your browser. It does not send your entered numbers to a separate calculation service. Your website may still use standard analytics or cookie tools independently of this calculator.

Disclaimer: This calculator provides illustrative business pricing estimates, not personalized tax, financial, or legal advice. It assumes a consistent workload, a fixed effective tax-reserve percentage on profit, and no changes in expenses or collections. Results exclude sales tax, platform fees not entered as expenses, payment delays, and taxes calculated using statutory brackets. Round and review your quote before sending it to a client.