Why the math works backward
Employees start from a rate and discover their income; freelancers must do the reverse, because three costs hide in the gap. First, expenses: everything your employer used to buy. Second, the buffer: self-employment tax means you pay both halves of Social Security and Medicare, and slow months need cushioning. Third — the one that breaks new freelancers — unbillable time: proposals, invoicing, marketing, and email are real work hours that no client pays for, which is why the calculator asks for billable hours, not working hours.
Sanity-check your result
- If the number shocked you, resist lowering the inputs to make it comfortable — lower the shock by raising rates gradually with each new client instead.
- The "+20% comfortable rate" line exists because your floor rate leaves no room for negotiation, scope creep, or a canceled project. Quote above your floor.
- Translate any staff-job offer you're comparing against with the hourly to salary calculator — then add roughly 30–50% to its rate to account for the benefits and unbillable time before comparing to your freelance number.
Frequently asked
How do I calculate my freelance hourly rate?
Work backward: add your desired personal income and your annual business expenses, gross that up for self-employment and income taxes, then divide by your truly billable hours — billable hours per week × working weeks per year. The result is the minimum rate that actually delivers your target income.
Why is my calculated rate so much higher than my old salary's hourly rate?
Because a salary hides costs that are now yours: both halves of payroll tax, health insurance, retirement, equipment, software, and — biggest of all — the unbillable hours you'll spend on marketing, admin, and finding clients. Freelancers typically bill only 50–70% of their working hours.
How many billable hours per week is realistic?
Most full-time freelancers sustainably bill 20–30 hours a week. Assuming 40 billable hours is the classic new-freelancer mistake — it prices your admin, marketing, and dry spells at zero.
Should I charge hourly or per project?
Many freelancers start hourly and move toward project pricing, using their hourly rate internally to price the project. Either way, you need this baseline number — project pricing without knowing your floor rate is guessing.