FreelanceWhat is the lowest rate you can afford to charge?
Work backwards from what you want to take home. The calculator adds the tax, the expenses, and the weeks nobody pays for, and shows every step.
Your minimum hourly rate
$84.36 an hour
$97,016 a year across 1,150 billable hours, before any margin for slow months.
Minimum rate $84.36 an hour.
What a working month adds to your runway
A typical working month at this rate covers 1.14 months of living costs, so each one adds about 0.14 months of runway. That surplus is what pays for your weeks off.
| From take-home to revenue | |
|---|---|
| Take-home you want | $70,000 |
| Self employment tax | $12,578 |
| Federal income tax | $6,438 |
| State income tax | $0 |
| Profit needed | $89,016 |
| Plus business expenses | $8,000 |
| Revenue needed | $97,016 |
| From revenue to a rate | |
| Weeks you work | 46 |
| Billable hours in the year | 1,150 |
| Minimum hourly rate | $84.36 |
| One working month at that rate | |
| Revenue | $9,139 |
| After expenses and tax | $6,663 |
| A month of living costs | $5,833 |
| Months of living costs covered | 1.14 months |
FreelanceCFO shows your effective hourly rate per client from what each one actually paid, so you can see who is above this line.
Start freeQuestions answered.
How do I calculate my freelance hourly rate?
Start from what you need to take home, not from what others charge. Add the income and self employment tax on the profit that produces it, add your business expenses, and divide by the hours you can actually bill in a year. That gives the lowest rate that covers your life. Your market rate may be higher, and should be if you can get it.
How many billable hours does a freelancer work?
Fewer than it feels like. Finding clients, invoicing, admin, and learning all take time nobody pays for, so a full week at the desk rarely means a full week billed. Use your own numbers if you track time. The difference matters: billing 25 hours a week instead of 35 raises the rate you need by 40%.
Why does the rate need to cover weeks off?
Because nobody pays you for them. Holidays, sick days, and the gaps between projects all come out of the same revenue. Six weeks off means earning a year's income in 46 weeks, so every working month has to produce a surplus. The runway line above shows how big that surplus is.
What does the runway figure mean?
It is what one ordinary working month at your minimum rate adds to your cushion. A working month at this rate covers a little more than a month of living costs, and the excess is what carries you through the weeks you are not billing. If the figure is close to zero, you have no margin for a slow month, and your rate should sit above the minimum.
Does this include self employment tax?
Yes. The tax lines include the 15.3% self employment tax on 92.35% of your profit and federal income tax after the standard deduction, the deductible half of self employment tax, and the qualified business income deduction, plus your state rate if you enter one. Health insurance and retirement savings are not modeled separately, so include them in your take-home target.
Should I charge more than the minimum?
Almost always. The minimum assumes every billable hour you planned gets billed, no client pays late, and nothing unexpected costs money. Pricing comfortably above it gives you room for a slow month without dipping into savings, and it is far easier to start higher than to raise a rate later.