For independent professionals
Turn your income goal, business costs, taxes, and available billable time into a sustainable hourly rate.
Last updated: October 2026
Your final price should also reflect expertise, urgency, scope risk, revisions, and market positioning.
Freelancers cover unpaid admin time, software, insurance, retirement, taxes, vacation, and gaps between projects. A sustainable rate must recover those costs during billable hours.
Value-based or fixed project pricing can exceed the hourly baseline when the work creates substantial value for the client.
It works backward from your desired personal income, business expenses, tax reserve, and realistic billable hours to a minimum hourly rate — the floor you need to charge just to sustain your business, before factoring in expertise, demand, or project value.
Wanting $75,000 in personal income, with $12,000 in annual business expenses, a 25% tax reserve, a 10% profit buffer, working 40 hours a week at 60% billable time across 48 weeks a year, comes out to roughly $111/hr as a minimum rate, rounded up to a suggested $115/hr. At that rounded rate, a 20-hour project would price at about $2,300 before any adjustment for expertise or urgency.
Freelancers cover costs an employee typically doesn't pay for directly, including unpaid admin time, software, insurance, retirement contributions, paid time off, and gaps between projects. A sustainable freelance rate needs to recover all of that during billable hours alone.
50-70% is a common starting range, since time also goes toward proposals, invoicing, client communication, and other unpaid admin work. Track your own time for a few weeks if you want a more accurate figure.
Treat it as a floor, not a target. Your actual rate should also reflect your expertise, project complexity, client budget, urgency, and how the market values the specific work you do.
Both are common. Value-based or fixed project pricing can exceed the hourly baseline when your work creates substantial value for the client, while hourly pricing gives a simple floor to negotiate from.
In depth
Freelance rates fail most often for one of three reasons: too many billable hours are assumed, taxes are underestimated, or business costs are forgotten. The calculator above handles all three with one formula. This section explains each part and shows a full example.
Required revenue = (desired income + business expenses) ÷ (1 − tax rate) × (1 + profit buffer)
Hourly rate = required revenue ÷ (hours per week × billable share × working weeks)
Suppose you want $70,000 of personal income, expect $8,000 a year in business costs, set aside 28% for taxes, and add a 10% buffer. Required revenue is ($78,000 ÷ 0.72) × 1.10 = $119,167. If you work 40 hours a week for 46 weeks and 60% of those hours are billable, you have 1,104 billable hours. The minimum rate is $119,167 ÷ 1,104 = about $108 an hour.
Compare that with the naive approach: $70,000 ÷ 2,080 hours = $33.65. Pricing at the salary-equivalent rate would leave you roughly $82,000 short of the revenue you need for the year.
Self-employed people pay self-employment tax of 15.3% (12.4% Social Security up to the annual wage base, $184,500 in 2026, plus 2.9% Medicare) on most net earnings, in addition to income tax. Half of the self-employment tax is deductible. Freelancers are also generally expected to pay estimated tax during the year rather than once at filing time; the IRS schedule is four payments, usually due in April, June, September and January.
Estimate the hours a project will take, multiply by your rate, and add a contingency for revisions. If a client asks for a fixed price, keep the hourly rate as your internal floor. If the quote falls below it, narrow the scope instead of cutting the rate.
Figures checked October 2026. Tax rules change; confirm with the linked official pages before filing or signing anything.