The freelance rate you can defend with math — target take-home, billable utilization, overhead, and self-employment tax.
Free hourly-rate calculator for freelancers, consultants, and contractors. See the minimum, sustainable, and premium rate you should charge to hit your target take-home.
Direct answers to the most common questions, in plain language. Skim if you're in a hurry; dig deeper below.
Start with target income, divide by billable hours, gross up for taxes and overhead.
The honest formula is (target take-home + overhead) ÷ billable hours, then grossed up for self-employment tax. The calculator above does all four steps — most freelancers under-charge because they skip the gross-up.
Most independent contractors hit 50–70% billable.
Even busy freelancers spend significant time on sales, admin, learning, and unpaid revision rounds. Counting only billable hours and ignoring the rest is the single most common reason rates are set too low.
Yes — 15.3% on most net earnings, before income tax.
Employees split FICA with their employer (7.65% each). Self-employed pay both halves (15.3%) on 92.35% of net earnings. If your target is a W-2 equivalent take-home, you must gross up — otherwise your rate is ~14% too low.
Software, insurance, equipment, taxes — usually $5k–$25k/yr.
Add up all annual business costs: software subscriptions, accounting fees, insurance, hardware refreshes, conferences, marketing. Treat your "overhead" line as a separate cost the rate must cover before take-home starts.
The mechanics in short answers — no jargon, no upsell.
What do you want to take home each year? Use a number that supports the life you actually live, not a market average.
If you're a 1099 contractor or LLC, you pay both halves of FICA. We divide by (1 − 0.153 × 0.9235) to find the pre-tax revenue you need.
Subscriptions, insurance, accountant, equipment. Every billable hour must cover its share of these fixed costs.
Take total work hours × utilization rate to get billable hours. Then required revenue ÷ billable hours = your rate.
Designed so anyone can model their situation in under a minute, with or without a finance background.
A number with math behind it is easier to negotiate than a number you pulled from the air.
Minimum (covers target), sustainable (+10% buffer), premium (+25% buffer) — pick the one that matches your market position.
Even busy freelancers bill only half their working hours. The calculator forces you to account for that.
Automatic 15.3% gross-up means your target income is your actual take-home, not your gross.
Software, insurance, equipment — all rolled into the rate so each billable hour covers them.
Set weeks-per-year to 48 or 46 to bake in vacation and sick days — your rate must cover them too.
Everything you might ask before, during, or after using this tool.
The percentage of your working hours that you actually invoice for. Even busy freelancers and consultants only bill 50–70% of their time — the rest goes to sales, admin, learning, and unpaid scope. New freelancers should start at 50% and adjust as they get a real sample.
Hourly is simpler and reduces scope risk. Project-based is better aligned with client outcomes and lets you keep the upside if you work faster. Many established freelancers do a mix — but the underlying rate math is the same.
A freelance rate of $100/hr at 1,000 billable hours per year is $100k revenue. Subtract overhead and self-employment tax — you might keep $65–75k. That's comparable to an $85–95k W-2 salary with benefits.
Yes — every billable hour must fund your unbilled weeks. The calculator does this for you: drop your "weeks worked" to 48 to bake in 4 weeks vacation/sick, and the rate adjusts upward.
When you're consistently booked out 4+ weeks ahead, when your peers in adjacent specialties charge more, when your skill set has measurably grown, or simply when your costs go up. Most freelancers raise too rarely, not too often.
For most single-member LLCs (default tax treatment), yes — you pay self-employment tax on net earnings. An S-corp election can reduce SE tax by paying yourself a "reasonable salary" via payroll, but it adds complexity and accounting costs.
It's a strong starting point for the rate floor. The actual price you can charge depends on your niche, location, and clients. Treat the result as "the minimum I can charge to hit my target" and negotiate upward from there.
A daily rate (often 8× hourly) feels less granular to clients and reduces nickel-and-diming. For project-style work, day rates often command a premium. The math doesn't change — just the unit.
Other Lazysmirk tools that pair well with this one.
Convert any hourly wage to annual, monthly, biweekly, and weekly salary. Includes overtime, unpaid leave, and a side-by-side offer comparison.
Convert any salary to hourly, daily, weekly, biweekly, or monthly pay. Model raises, compare inflation-adjusted pay, and see the real per-hour rate when you work overtime.
Calculate your real take-home pay after federal, state, and FICA taxes. Includes 401(k), HSA, health insurance, and other pre-tax deductions.
Estimate your 2026 US federal income tax: brackets, FICA, effective rate, deductions, capital gains, and take-home pay — all in one place.
Calculate gross, operating, and net profit margins on any product, service, or business. See the difference between margin and markup, and price like you mean it.
The most common rate-setting error is "I used to make $X as an employee, so I'll charge $X / 2,080 hours." This ignores three big realities: (1) only half your hours are billable, (2) you pay all of FICA, (3) you have no employer covering insurance, equipment, or paid time off.
When you stack those, the honest equivalent of a $100k W-2 is closer to $140–150k freelance revenue. The calculator above does the math so you can sanity-check before sending the next quote.
Minimum is the rate that covers your target with zero buffer — every billable hour matters. Use it as a floor.
Sustainable adds ~10% so a slow month doesn't blow up your year. This is the rate most freelancers should default to.
Premium adds ~25% — useful when you have leverage (specialized niche, referral pipeline, retainer clients) and want to capture it without selling more hours.
A 100% utilization rate means every working hour is billed. Outside agencies with strict sales pipelines, almost no one hits this. New freelancers commonly land at 30–50%. Established freelancers in a high-demand niche reach 70–80%.
The lower your utilization, the higher your billable rate must be. Drop the slider to 50% and watch the rate jump — that's the cost of not having a steady book of business.
Anything you'd pay for even if you took a month off: software subscriptions, accounting and tax prep, professional liability insurance, hardware (laptop refresh, monitor, phone), home-office utilities (if dedicated), training and conferences, marketing and website, business banking and merchant fees.
Most freelancers underestimate overhead by 2–3×. Spend an hour pulling 12 months of business expenses and you'll usually find $10k–$25k of recurring costs.
Two short notes worth reading before you trust any number on this page.
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We are not a bank, NBFC, advisor, broker, or distributor of any financial product. The numbers shown here are estimates for educational purposes only, based on the inputs you provide.
Results are not financial, legal, or tax advice. Please consult a qualified professional before any decision about your loan, investments, or personal finances. Actual loan terms and charges depend on your bank and individual circumstances.
