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Most freelancers undercharge because they price like an employee — they forget that they now pay the taxes, the downtime, the software, and the health insurance. This works backward from the take-home you actually want.
Nothing you type leaves your browser. This isn't tax advice — talk to an accountant about your situation.
The mistake nearly every new freelancer makes is dividing their old salary by 2,080 hours and calling it a rate. That number is a trap. As an employee, your employer quietly covered half your payroll taxes, your health insurance, your paid time off, your equipment, and the hours you spent in meetings instead of doing billable work. Freelancing, you pay for all of it — out of the rate you charge.
So the right way to price is to work backward from the life you want, not forward from an hourly number that "sounds reasonable." Here is the formula this calculator uses:
The two numbers people get most wrong are billable hours and time off. A 40-hour week is not 40 billable hours — between sales calls, invoicing, scope creep, and email, 25 genuinely billable hours is a healthy real-world target. And every week you take off is a week you earn nothing, so it has to be funded by the weeks you work. Drag those two sliders and watch how fast your required rate climbs — that gap is exactly why so many freelancers feel busy but broke.
There's no universal number — a copywriter in a low-cost city and a cloud architect in San Francisco can both be priced correctly at wildly different rates. The only rate that's "right" is the one that funds the take-home, taxes, expenses, and margin you entered above. If the number this calculator returns feels high, that's usually a sign you've been subsidizing your clients, not that the math is wrong.
Most experienced freelancers move to fixed project or value-based pricing — clients prefer a predictable number, and you stop being penalized for working fast. But you still need an hourly rate underneath it as your floor: estimate the hours a project will take, multiply by the rate this calculator gives you, and that's the minimum the project should earn.
Enter your combined effective rate — federal and state income tax plus self-employment tax (the ~15.3% that covers both halves of Social Security and Medicare). For many US freelancers that lands somewhere between 25% and 35%, but it depends entirely on your income and location. Your accountant can give you a precise figure.
Expenses are money you know you'll spend. The safety margin covers what you can't predict: the client who pays 60 days late, the month with no work, the project that runs over. It's also where your actual profit lives — the cushion that lets the business grow instead of just break even.
No. Every calculation runs entirely in your browser — nothing you type is sent to a server or stored. The link in your address bar updates so you can bookmark or share a scenario, but that link only contains the numbers you chose.
Keep going
See what a salary really equals as a freelance rate — and the reverse.
Ready to charge more? See your new rate and the annual impact.
Check a project's true effective rate against the number above.