Your Desired Take-Home
The amount you want to deposit into your personal bank account after taxes and expenses.
Taxes & Expenses
Combined income + SE tax rate (25-35% typical).
Software, equipment, insurance, home office, etc.
Your Schedule
Vacation, sick days, holidays. 4 weeks is typical.
Hours you actually bill (not admin, marketing, etc.).
Your Freelance Rate
Tip: The rate shown is your minimum. Consider adding 10-20% as a buffer for unbilled time and slow months.
Finding Your True Freelance Hourly Rate
Most freelancers undercharge because they compare their hourly rate to a salaried employee's equivalent without accounting for the hidden costs of self-employment. When you're freelancing, you need to cover your own taxes (15.3% in self-employment tax alone), health insurance, retirement savings, business expenses, and unpaid time off.
The formula is straightforward: take your desired annual take-home pay, add back the taxes you'll owe (use our 1099 tax calculator for a precise estimate), add your annual business expenses, and divide by the number of hours you'll actually bill in a year.
Why Billable Hours Matter More Than Total Hours
A 40-hour work week doesn't mean 40 billable hours. Between finding clients, sending proposals, doing admin, marketing, bookkeeping, and professional development, most freelancers only bill 25-30 hours per week. This is the number that determines your rate — not the total hours you work.
The Vacation Factor
Employees get paid vacation. Freelancers don't. If you take 4 weeks off per year (vacation, sick days, holidays), you only have 48 billable weeks. That's 48 × 30 = 1,440 billable hours. Every week off raises the rate you need to charge on the weeks you work.