How to use this calculator
- Choose your starting point:
- A salary to match: the salary of the job you’d otherwise take. We work out what that job would leave you after taxes and set that as your take-home goal.
- Take-home goal: the spendable income you want each year after taxes, health insurance and retirement savings.
- Enter your yearly business expenses: software, equipment, insurance, accounting, marketing, coworking, travel.
- Enter the benefits you’ll replace: your monthly health insurance premium and the amount you’ll save for retirement each year (for example, what an employer’s 401(k) match would have been).
- Enter your billable hours per week and weeks off per year for vacation, holidays and sick days.
- Under Tax settings, set your filing status, an effective state and local income tax rate, whether to include the 20% qualified business income (QBI) deduction, and how many hours make a billed day.
How the rate is calculated
The calculator finds the revenue that leaves you exactly your take-home goal, then divides by your billable hours:
Taxes depend on the revenue, so the calculator solves for it rather than adding a flat percentage. It applies 2026 rules:
- Self-employment tax: 15.3% of 92.35% of net profit (12.4% Social Security up to the $184,500 wage base, 2.9% Medicare), plus 0.9% Additional Medicare Tax over $200,000 ($250,000 married filing jointly).
- Deductions before income tax: half of your self-employment tax, your health insurance premiums (the self-employed health insurance deduction) and your retirement contributions.
- Federal income tax: 2026 brackets and standard deduction, minus the 20% QBI deduction if you include it.
- State and local tax: your effective rate times adjusted gross income.
For the salary comparison, the employee pays 7.65% Social Security and Medicare and federal income tax on salary minus the standard deduction, and the employer covers health insurance and the retirement match.
Worked example
You’re leaving an $85,000 job, single, in a state with about a 4% effective income tax. That job would leave you $65,228 after $6,503 of Social Security and Medicare, $9,870 of federal income tax and $3,400 of state tax.
As a freelancer you’ll pay $600 a month for health insurance, save $4,000 a year for retirement and spend $8,000 on business expenses. To keep the same $65,228, you need to bill $108,137 a year:
| Where the revenue goes | Amount |
|---|---|
| Take-home pay | $65,228 |
| Self-employment tax | $14,149 |
| Federal income tax (after a $13,153 QBI deduction) | $6,286 |
| State income tax | $3,275 |
| Health insurance and retirement | $11,200 |
| Business expenses | $8,000 |
| Revenue | $108,137 |
With 6 weeks off and 30 billable hours a week, you have 1,380 billable hours. Your minimum rate is $108,137 ÷ 1,380 = $78.36 an hour, or $626.88 for an 8-hour day. That’s 1.92 times the $40.87 hourly pay of the salaried job. Without the QBI deduction, the rate rises to $81.76.
Billable hours change everything
The same $108,137 revenue target at different billable hours (46 working weeks):
| Billable hours a week | Hours a year | Hourly rate | Day rate |
|---|---|---|---|
| 15 | 690 | $156.72 | $1,253.76 |
| 20 | 920 | $117.54 | $940.32 |
| 25 | 1,150 | $94.03 | $752.26 |
| 30 | 1,380 | $78.36 | $626.88 |
| 35 | 1,610 | $67.17 | $537.33 |
| 40 | 1,840 | $58.77 | $470.16 |
Going from 30 to 20 billable hours a week, which is easy to do once you count sales calls, invoicing and admin, raises your required rate by about half.
Freelance rates for common salaries
Using the same assumptions (single, 4% state tax, $600/month health insurance, $4,000 retirement, $8,000 expenses, 30 billable hours, 6 weeks off):
| Salary to match | Revenue needed | Minimum hourly rate | Day rate | Multiple of salary’s hourly pay |
|---|---|---|---|---|
| $50,000 | $73,871 | $53.53 | $428.24 | 2.23× |
| $60,000 | $84,297 | $61.08 | $488.68 | 2.12× |
| $85,000 | $108,137 | $78.36 | $626.88 | 1.92× |
| $100,000 | $123,263 | $89.32 | $714.57 | 1.86× |
| $120,000 | $143,432 | $103.94 | $831.49 | 1.8× |
| $150,000 | $172,827 | $125.24 | $1,001.89 | 1.74× |
The multiple shrinks as salary rises mainly because health insurance and business expenses are fixed costs, which weigh less on a bigger income.
Tips for setting your rate
- Treat this as a floor, not a price. It covers your costs and matches a salary. Market rates for your skills, the value you deliver and your demand should set the actual price.
- Price in slow months. Gaps between projects are unpaid. Add a cushion to your rate or enter more weeks off.
- Remember what employers pay for. On average, benefits made up 30.0% of private employers’ compensation costs in June 2026, according to the Bureau of Labor Statistics. Freelancers fund those themselves.
- Set aside tax every month. Freelancers usually pay quarterly estimated taxes. The self-employment tax calculator and income tax calculator help you size those payments.
- Compare offers fairly. If a client offers a salaried role instead, run it through the salary calculator and compare take-home pay, not headline numbers.
Assumptions and limitations
Results assume freelancing is your household’s only income, you’re a sole proprietor or single-member LLC taxed as one, and you have no employees or significant business property. Above the 2026 QBI threshold ($201,750 single, $403,500 joint) the deduction is phased out over the next $75,000 ($150,000 joint), and for specified service businesses it can disappear faster; the minimum $400 QBI deduction is applied when qualified income is at least $1,000. The health insurance deduction assumes you aren’t eligible for an employer plan. State tax is a flat effective rate, and tax credits, the employee’s own benefit contributions and paid leave are not modeled.
Sources
- IRS Topic 554: Self-employment tax
- IRS: Instructions for Form 8959, Additional Medicare Tax
- IRS: About Form 7206, Self-Employed Health Insurance Deduction
- IRS Rev. Proc. 2025-32: 2026 tax brackets, standard deduction and QBI thresholds
- IRS: Qualified business income deduction
- IRS Publication 15 (2026): Social Security wage base $184,500
- Bureau of Labor Statistics: Employer Costs for Employee Compensation, June 2026
This calculator is a planning tool, not tax advice. A tax professional can confirm your self-employment tax, QBI deduction and quarterly payments.
Frequently asked questions
How do I calculate my freelance hourly rate?
Add up the take-home pay you want, the taxes you'll owe, the benefits you'll pay for yourself and your business expenses. That's the revenue you need. Divide it by the hours you can actually bill in a year, after time off and unbillable work, and you have your minimum rate.
How much should I charge compared with my old salary?
In our default example, matching an $85,000 salary takes $78.36 an hour at 30 billable hours a week, about 1.9 times the salary's $40.87 hourly pay. The multiple tends to be higher for lower salaries and lower for higher ones. It depends heavily on your billable hours.
Why do freelancers need to charge so much more than employees earn?
You pay both halves of Social Security and Medicare, buy your own health insurance and retirement savings, cover your own equipment and software, and aren't paid for holidays, vacation, sick days or time spent finding clients. Employers spend a lot on those things too; private employers' benefit costs averaged 30% of total compensation in June 2026.
How many billable hours should I plan for?
Fewer than you think. Admin, sales, invoicing and learning all take time you can't bill, so a 40-hour week usually has well under 40 billable hours. Use your own time records if you have them. The table in the results shows how much your rate changes from 15 to 40 billable hours.
What is self-employment tax in 2026?
It's 15.3% on 92.35% of your net self-employment earnings, made up of 12.4% for Social Security on earnings up to $184,500 and 2.9% for Medicare on all of it, plus 0.9% Additional Medicare Tax above $200,000 for single filers. You can deduct half of it (excluding the additional 0.9%) when figuring your income tax.
How do I turn an hourly rate into a day rate?
Multiply the hourly rate by the hours you'll bill in a day, usually 8. At $78.36 an hour that's $626.88 a day. Some freelancers add a premium for project or retainer work that guarantees full days.
Updated November 2026. Results are estimates for educational purposes and depend on the inputs you provide.