Set Your Goal
Enter the annual net income you actually want to deposit into your personal bank account.
100% Client-Side · Your Income Data Never Leaves
A freelance rate calculator reverse-engineers the minimum hourly or day rate you must charge to hit your desired annual take-home pay. It accounts for self-employment taxes, health insurance, retirement contributions, unbillable hours, vacation, and overhead costs most freelancers forget.
Your Goals & Reality
Your Real Rates
Minimum Hourly Rate
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Minimum Day Rate
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Gross Revenue Needed
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Billable Hours / Year
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Weekly Billing Target
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Monthly Billing Target
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Where Your Income Goes
Watch your gross revenue get devoured by deductions.
Enter your goals to see the deduction waterfall.
The 40-Hour Myth
How your "40-hour work week" actually breaks down.
Enter your goals and hit Reverse-Engineer to see the reality.
What If You Charged…
See how different hourly rates affect your annual income.
| Hourly Rate | Day Rate | Annual Gross | Annual Take-Home | Monthly Take-Home | Viable? |
|---|---|---|---|---|---|
| Enter your costs above to generate rate scenarios. | |||||
Salary vs. Freelance
How It Works
Add the Reality Tax
We layer on self-employment taxes, insurance, overhead, PTO, and unbillable admin hours.
See the Waterfall
Watch your gross revenue get devoured layer by layer — taxes, insurance, tools, and lost time.
Get Your Floor
See the absolute minimum hourly and day rate you must charge — or you're working for free.
Freelance Tech Essentials
Tracking time accurately is the single most important habit for hitting your target rate. We recommend a physical time-tracking cube to build the habit of logging every billable minute without opening software. For invoicing and tracking your business expenses to lower your taxable income, an automated bookkeeping platform is essential so you aren't wasting your unbillable hours in spreadsheets.
How the Tax Math Works Here
This tool solves backwards: it searches for the gross revenue whose take-home lands exactly on your target, rather than dividing by a single blended multiplier. That matters because the US self-employment tax is not a flat percentage of everything you bill. It applies to 92.35% of your net profit after deductible business costs, its Social Security half stops at a wage base, and half of what you pay comes back as a deduction against income tax. A single multiplier cannot represent any of that, and every simplification of it pushed the answer in a different direction.
The tax rates above are defaults you can overwrite, and the tax year for each is stated in the FAQ below. Rates and thresholds change annually, so check the figures against the cited IRS, GOV.UK and ATO pages before you rely on the output. This page computes; it does not advise, and it knows nothing about your filing status, deductions, credits, or state and local taxes.
How to Calculate Your True Freelance Rate
Most freelancers make the mistake of calculating their hourly rate based on a standard 40-hour work week (2,080 hours a year). This is a fast track to burnout and undercharging. As a freelancer, you are running a business, which means you have unbillable hours (marketing, admin, invoicing), business overhead (software, equipment, insurance), and self-employment taxes that W-2 employees don't pay. RateRealist reverses the math: you start with your desired take-home pay, and we calculate the exact gross revenue you need to generate, divided only by the actual billable hours you'll work after accounting for vacations and admin time. This ensures your hourly or day rate actually covers your life and your business expenses.
Frequently Asked Questions
How do freelancers calculate their hourly rate?
Start with your desired annual net income, then add: self-employment taxes (15.3% in the US), health insurance, retirement contributions, software/tools, and professional development. Divide by actual billable hours — not 2,080 (40hrs × 52 weeks), but typically 1,200-1,400 hours after subtracting vacation, sick days, admin time, and business development.
How many billable hours do freelancers actually work?
Most freelancers bill 60-70% of their working hours. The rest goes to invoicing, client communication, proposals, marketing, bookkeeping, and professional development. On a 40-hour work week, that is 24-28 billable hours — not 40. This is the single biggest mistake new freelancers make when setting rates.
Should I charge hourly or a day rate?
Day rates reduce scope creep and admin overhead. Clients know exactly what a day costs, and you avoid the awkwardness of tracking 15-minute email blocks. Day rates also tend to be higher per-hour than hourly rates because clients perceive them as a project commitment rather than a meter running.
Which tax year and figures does this calculator use?
US figures are the 2026 ones published by the IRS. Self-employment tax is 15.3% (12.4% Social Security plus 2.9% Medicare) charged on 92.35% of net earnings from self-employment, with the Social Security portion stopping at the $184,500 wage base (Topic no. 751) and Additional Medicare Tax of 0.9% on net earnings above $200,000 for a single filer (Topic no. 554). The tool deducts one-half of the self-employment tax before income tax, along with your health insurance premium. Deductible business costs come off gross revenue at face value, because they never enter the tax base at all. Outside the US both rates are applied to profit with no cross-deduction and no thresholds or caps, which errs high: UK Class 4 National Insurance is 6% for tax year 2026 to 2027, and the Australian preset uses the 30% marginal rate for the 2026-27 income year plus the 2% Medicare levy.