Why freelance rates are higher than salaries
An employee earning $75,000 also gets paid holidays, the employer’s half of Social Security and Medicare, health insurance and equipment. As a freelancer you pay all of that yourself, and you can’t bill every hour: finding clients, admin and learning take time. That is why a fair freelance rate is often 1.5 to 2 times the hourly equivalent of a salary.
How this calculator works
- Add the income you want to your yearly business costs.
- Gross that up for the employer half of self-employment tax.
- Divide by the hours you can realistically bill in a year.
Example: $75,000 + $8,000 costs, grossed up for 7.65%, is about $89,900. Over 46 weeks × 25 billable hours (1,150 hours) that is about $78 an hour.
Sense-check your rate
- Compare with rates for similar work and experience in your market.
- Charge by project for well-defined work; clients compare totals, not hourly rates.
- Raise rates for new clients first, then existing ones with notice.
When you have your rate, use the freelance invoice template to bill it.
Day rates and project prices
Once you know your hourly rate, a day rate is usually 7 to 8 hours’ worth, sometimes with a small discount for booking whole days. For a fixed-price project, estimate the hours, multiply by your rate and add a buffer of 15–25% for revisions and unknowns. Track your real hours on a few projects to see how good your estimates are.
Related calculators
- Freelance Invoice Template: Ready-made invoice for a freelancer.
- Free Invoice Generator: Make a professional invoice and download the PDF.
- Consulting Invoice Template: Ready-made invoice for a consultant.
Questions people ask
How many billable hours should I assume?
Most freelancers bill 20 to 30 hours in a 40-hour week; the rest goes on admin, sales and learning.
Does this include income tax?
No. It covers self-employment tax and costs; income tax depends on your total income, deductions and state. Set money aside for it from every payment.
Formula checked October 2026 · How we calculate