Freelance Rate Calculator
How much do you want to take home?
Software, equipment, insurance, etc.
Hours charged to clients (exclude admin tasks).
Vacation, holidays, and sick days.
Self-employment and income tax estimate.
Buffer for business growth/savings.
You should charge at least:
$0.00 / hr
$0
Gross Revenue Needed
0
Total Billable Hours
$0
Daily Rate (8h)
Understanding Your Freelance Rate
Calculating your freelance hourly rate is one of the most challenging aspects of starting a business. Unlike a traditional salary where taxes and overhead are handled by the employer, a freelancer must account for self-employment taxes, business expenses, unbillable administrative time, and time off.
This calculator, inspired by methodologies used by platforms like Bonsai, uses a "bottom-up" approach. Instead of guessing a market rate, it starts with your financial goals and works backward to determine what you need to charge to sustain your lifestyle.
Key Factors in the Calculation
- Billable Hours: Most freelancers cannot bill 40 hours a week. Time spent on marketing, accounting, emails, and learning new skills is unpaid. A healthy benchmark is 20-30 billable hours per week.
- Overhead & Expenses: This includes hardware, software subscriptions, coworking space fees, health insurance, and internet costs. These must be covered by your hourly rate.
- Taxes: As a freelancer, you are responsible for the full burden of Social Security and Medicare taxes (in the US), plus income tax. This often totals 25-30% or more of gross revenue.
- Weeks Off: You don't get paid vacation days. To afford time off for holidays or illness, your working hours must generate enough surplus revenue to cover these gaps.
Why Your Rate Seems High
If you earned $50/hour as an employee, your freelance rate might need to be $85-$100/hour to maintain the same standard of living. This "freelance premium" covers the risk, lack of benefits, and operational costs that come with running your own business.
How to Use This Rate
The output of this calculator is your floor rate—the minimum you need to charge to meet your financial goals. Depending on your experience level, niche expertise, and client budget, you should aim to charge above this floor to generate true profit.