Freelance Rate Calculator
Find out what you need to charge per hour to hit your income goals. Factor in self-employment taxes, health insurance, and business expenses to see your true effective rate and W-2 salary equivalent.
Income
Expenses & Deductions
Gross Annual
$144,000
After Expenses
$103,253
Monthly Take-Home
$8,604
Effective $/hr
$53.78
Deduction Breakdown
W-2 Salary Comparison
To match your freelance income, a W-2 employer would need to offer the following salary (accounting for employer-paid FICA, health insurance, and retirement matching).
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Track Every Billable Hour Automatically
Your hourly rate only matters if you capture every billable minute. Rize tracks your time automatically in the background, so you never leave money on the table.
How to Set Your Freelance Rate
Setting the right freelance rate requires more than dividing a desired salary by 2,080 hours. You need to account for taxes, benefits, and the reality that not every working hour is billable.
Calculate your minimum viable rate
Start with your annual expenses: living costs, self-employment tax (15.3%), health insurance, retirement savings, and business overhead. Divide this total by your realistic billable hours per year. For most freelancers, that number is 1,000 to 1,500 hours — far fewer than the 2,080 hours in a standard W-2 year. This gives you the floor below which you lose money.
Account for non-billable time
Only 60-70% of a freelancer's working hours are typically billable. The rest goes to invoicing, marketing, email, proposals, and administrative tasks. If you work 40 hours per week, assume 25-28 are billable. Your rate must cover the full 40 hours of effort, not just the billable ones — which is why freelance rates are significantly higher than equivalent W-2 hourly pay.
Compare to market rates
Your minimum viable rate is a floor, not a target. Research what others in your field and experience level charge, then position yourself accordingly. Charging below market undervalues your work and attracts price-sensitive clients. Use the calculator above to model different rates and see how they translate to take-home pay after all deductions.
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Frequently Asked Questions
How do I set my freelance hourly rate?
Start with your desired annual income, then add self-employment taxes (15.3%), health insurance, retirement savings, and business expenses. Divide the total by your realistic number of billable hours per year. Most freelancers can bill 25-30 hours per week after accounting for admin, marketing, and downtime — so your rate needs to be higher than a simple salary-to-hourly conversion suggests.
What expenses should I factor into my freelance rate?
Beyond self-employment tax (15.3% covering Social Security and Medicare), factor in health insurance premiums, retirement contributions, software and tools, professional development, liability insurance, accounting fees, and unpaid time off. These costs are typically covered by employers for W-2 employees, so your hourly rate needs to be 25-50% higher than an equivalent salaried position to maintain the same take-home pay.
How does my freelance rate compare to a W-2 salary?
A freelancer charging $75/hour is not equivalent to earning a $156,000 salary. W-2 employees receive employer-paid benefits worth 25-40% of their salary — including half of FICA taxes, health insurance, retirement matching, and paid time off. Use the W-2 comparison in our calculator to see the true salary equivalent of your freelance rate, or figure out what rate you need to charge to match a specific salary offer.