About this tool
Freelancers underprice themselves by dividing a salary by 2,080 hours. A contractor bills perhaps 25 hours a week, takes unpaid time off, pays both halves of Social Security and Medicare, and covers every expense an employer would have covered. This calculator starts from the take-home you want and works upward through tax, expenses, and billable hours to the rate that actually delivers it.
The result is often double the "salary divided by hours" figure, which is normal: it is what an agency would charge for the same person. Use the day rate for project quotes and the hourly rate for retainers.
How to use it
- Enter the yearly take-home you want and your yearly business expenses.
- Estimate your total tax rate on profit (self-employment tax plus income tax).
- Enter the hours you can actually bill each week and the weeks you will not work. The rate updates live.
Questions
What tax rate should a US freelancer assume?
Self-employment tax is 15.3% of net profit (12.4% Social Security up to the wage base plus 2.9% Medicare), and half of it is deductible, then federal and state income tax apply on top. 25 to 35% of profit covers most freelancers earning under six figures; higher earners should model it properly.
How many hours are really billable?
Full-time freelancers typically bill 20 to 30 hours a week. The rest goes to finding work, invoicing, meetings that are not billed, and learning. Assuming 40 is the most common pricing mistake.
Is anything I type sent anywhere?
No. The calculator runs entirely in your browser; nothing is stored or transmitted. Refresh the page and it starts clean.
Is it free, are files uploaded, which browsers work: the general questions are answered once for the whole site.