Freelance Rate Calculator
You charge $50/hr but take home $28. See the real math — and what you should actually charge.
How to Use This Calculator
What Should I Charge? tab
Enter your desired annual take-home income and billable hours per week (be realistic: 25-30, not 40). The calculator adds self-employment tax (15.3%), income tax, health insurance, business expenses, and retirement savings — then divides by your actual billable hours to show your minimum viable rate.
Am I Undercharging? tab
Enter your current hourly rate and hours worked per week. See your effective hourly rate — what you actually take home per hour after all deductions. Most freelancers are shocked: a $50/hr rate typically yields $28-32/hr effective.
Freelance vs Salary tab
Compare your freelance rate against a salary offer. The calculator adds the hidden value of employee benefits (health insurance, 401k match, PTO) to show the true total compensation gap.
The Formula
Key insight: billable hours ≠ working hours. A 40-hour week has ~30 billable hours (the rest is admin, sales, invoicing). Working 49 weeks/year (3 weeks vacation) = 1,470 billable hours — not the 2,080 that salaried workers use.
Example
Marcus — Web Developer in Portland
Marcus wants to take home $80,000/year. He bills 30 hours/week and takes 3 weeks vacation.
Marcus was charging $55/hr. The "Am I Undercharging?" tab showed his effective rate: $31/hr. He raised his rate to $90/hr. Two clients left, but his annual income increased by $22,000 because he was finally covering his real costs.