Find your minimum viable hourly freelance rate based on income goals, work schedule, overhead costs, and self-employment taxes.
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Desired Annual Take-Home Income$85,000
$20K$250K$500K
Hours Worked per Week40 hrs
10h35h60h
Vacation & Sick Days per Year20 days
03060
Billable Time (% of work hours)60%
20%55%90%
Overhead + Self-Employment Tax30%
10%30%50%
Minimum Hourly Freelance Rate
$142
per billable hour
1,248 billable hours/year · Gross needed: $110,500 · This is your floor, not your ceiling.
$110,500
Gross Revenue Needed
1,248
Billable Hours/Year
$1,136
Daily Rate (8h)
$9,208
Monthly Billing Target
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Why Your Freelance Rate Must Cover More Than Your Salary
Employees have invisible benefits: paid vacation, employer-matched taxes (~7.65% FICA), health insurance, retirement contributions, equipment, software, training. As a freelancer, every one of those costs comes out of your revenue. A $85,000 salary with benefits is roughly equivalent to $120,000–$130,000 in freelance revenue.
The other killer is non-billable time. Most freelancers realistically bill 50–65% of their working hours — the rest goes to business development, client communication, invoicing, skill development, and admin. At 40h/week and 60% billable, you have 1,248 actual billable hours per year, not the 2,080 an employee works.
How do I calculate my freelance hourly rate?
Formula: (Desired income + overhead + taxes) ÷ billable hours. If you want $85K take-home with 30% overhead and 1,248 billable hours: ($85,000 × 1.30) ÷ 1,248 = $88.62/hour minimum.
What percentage of freelance revenue should go to taxes?
In the US, freelancers pay self-employment tax (15.3% on first ~$160K of net earnings) plus income tax. Effective total is typically 25–35% for most income levels. Set aside at least 30% for taxes quarterly.
Should I charge hourly or project-based?
Project-based pricing rewards efficiency and often earns 2–3x more than hourly billing. Once you know your hourly floor from this calculator, use it to anchor project quotes rather than billing hour-by-hour.
How many billable hours can a freelancer realistically work?
Most full-time freelancers bill 900–1,300 hours per year (50–65% of a 40h/week schedule). Very efficient freelancers with long-term clients bill 1,400–1,600 hours. Over 1,600 hours/year is rare and unsustainable long-term.
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