How much should a freelancer charge?
Most freelancers pick a number that sounds reasonable and hope it works. Here's how to set a rate that actually covers your life, your taxes, and the hours you can't bill.
Skip the math — the free freelance rate calculator runs this from your own figures.
Open the free calculator →Start with what you need to take home, not what others charge
Competitor rates tell you what the market tolerates, not what your business needs. The right starting point is your own target take-home income — the money you actually want in your pocket after a year of work.
Write that number down first. Everything else is built to make sure your rate delivers it.
Add the costs a salary used to hide
As an employee, an employer quietly covered software, hardware, health insurance, paid time off, and half of your payroll taxes. As a freelancer, all of that comes out of your rate.
Total your real annual business expenses — subscriptions, gear, insurance, a coworking space, an accountant — and add them to your income goal. That combined number is what your billable work has to generate before tax.
You cannot bill 40 hours a week
This is where most rates break. A full-time week is 40 hours, but a huge share of that goes to admin, sales, proposals, invoicing, and unpaid revisions. Realistically, many freelancers bill 20–30 hours a week.
Divide your annual target by your realistically billable hours — not your total working hours. Charging as if every hour is billable is the fastest way to quietly work for minimum wage.
Gross up for taxes
Self-employment tax and income tax can take a meaningful slice of every dollar you invoice. If you set aside, say, 25–30% for taxes, your rate has to be high enough that the after-tax remainder still hits your goal.
The math: divide your pre-tax target by (1 − your tax rate) to find what you actually need to bill.
Put it together
The formula is: (target take-home + annual expenses) ÷ (billable hours per week × working weeks) ÷ (1 − tax rate) = your hourly rate.
You don't have to do this by hand — the free calculator below runs it in seconds from your own numbers, then shows the day rate too.
Questions
Should I charge hourly or a fixed project price?
Fixed-price is usually better for you once you know your speed — clients prefer certainty and you keep the upside when you work efficiently. But you still need an accurate hourly rate underneath it, so you can price projects at your real cost of time.
How often should I raise my rate?
At least once a year, and any time you're fully booked. Being at capacity is the clearest signal your rate is too low.