Freelance Rate Calculator — Convert Salary to Hourly
Find your target hourly rate based on your desired salary, factoring in self-employment tax, business expenses, PTO, and benefits.
A freelance rate calculator transforms your target annual salary into the actual billable rate you need to charge. The simple division of salary by 2,080 hours rarely works in practice — because freelancers don't bill 40 hours every week. You need to account for unpaid time off, holidays, business development, administrative work, and the reality that most independent contractors bill only 60-75% of their working hours.
Beyond billable hours, self-employment tax takes 15.3% off the top, health insurance can cost $500-$1,000+ per month without employer subsidies, and retirement contributions come entirely from your own pocket. Business expenses like software subscriptions, equipment, internet, and professional services typically consume 10-20% of revenue.
How to Use This Calculator
- Step 1 — Enter your target annual salary — the amount you want to actually take home after all expenses.
- Step 2 — Set your expected business expense ratio, PTO days, and annual benefits cost like health insurance.
- Step 3 — Select your state to factor in state income tax and self-employment tax obligations.
- Step 4 — Review your minimum hourly rate, monthly revenue target, and total annual revenue needed to hit your goal.
Frequently Asked Questions
How do I calculate my freelance hourly rate?
Start with your target annual salary, add self-employment tax, business expenses, health insurance, and retirement. Divide by billable hours (typically 1,500-1,800 per year).
How many billable hours per year?
Most freelancers bill 60-80% of their working time, resulting in 1,200-1,500 billable hours per year.
What expenses should I factor in?
Equipment, software subscriptions, internet/phone, office space, professional services, insurance, and continuing education. Typically 10-20% of revenue.
Should I charge more than the calculator suggests?
Yes. The calculator gives a minimum break-even rate. Add 10-20% profit margin for business growth and unexpected expenses.
How does location affect my freelance rate?
High-tax states like California or New York can add 6-13% to your required rate compared to no-income-tax states.
Data source: IRS 2026 tax brackets, Social Security Administration wage base, and state revenue department publications. Last reviewed: 2026-07-05.