What Should You Charge as a Freelancer?
Most freelancers set their rate by dividing a target salary by 2,080 hours. That ignores taxes, insurance, unpaid time off, and non-billable work. This calculator shows your real number.
Your Target Income
Your Time
Rest is admin, sales, marketing
You should charge at least
$102/hr
to take home $80,000/year after taxes, insurance, and expenses
The naive calculation says $39/hr — here's why that's wrong
Dividing $80,000 by 2,080 hours (40hr/week x 52 weeks) ignores: self-employment tax (15.3%), health insurance ($6,000/yr), retirement ($6,000/yr), vacation (3 weeks unpaid), sick days (5 unpaid), holidays (10 unpaid), and non-billable time (30% of your hours). That's a $63/hr difference — 164% more than the naive number.
Hourly
$102
Daily (8hr)
$811
Weekly
$4,055
Monthly
$10,879
Full Breakdown
Why the Naive Hourly Calculation Is Wrong
Employees get benefits that freelancers have to pay for themselves. When you go freelance, you lose:
- Employer-paid FICA taxes (7.65%) — you now pay both halves: 15.3% self-employment tax
- Health insurance — employer plans average $7,900/year for individuals; you pay 100%
- Paid time off — vacation, sick days, and holidays are now unpaid
- Retirement match— no more 401(k) match, and you're responsible for your own contributions
- Non-billable time — invoicing, marketing, sales, admin, and learning typically consume 20-40% of your hours
How to Use This Calculator
Target take-home income — the annual amount you want to deposit into your personal bank account after all business costs and taxes. Think of this as your equivalent W-2 salary.
Billable time percentage— the most impactful and most underestimated variable. New freelancers often bill only 50-60% of their time. Established freelancers with steady clients might reach 75-80%. If you're spending significant time on sales and marketing, lower this number.
The result is your minimum rate— you should charge at or above this number. Charging below it means you're effectively earning less than your target income.