Freelance Rate Calculator 2026: Set Your Hourly Rate from Target Income
Setting a freelance rate is one of the most critical and misunderstood aspects of self-employment. Most freelancers make the mistake of simply matching their previous salaried hourly rate — but this leaves them significantly underpaid. A salaried employee earning $80,000/year ($38.46/hour) has their employer covering health insurance ($8,000-$16,000/year), retirement match ($2,400-$6,000), payroll taxes ($6,120), paid time off ($6,000-$10,000), and equipment. To match that total compensation as a freelancer, you need to charge $58-$75/hour — 50-95% more than the salaried hourly equivalent.
Self-employment tax is the biggest hidden cost of freelancing. As a W-2 employee, you pay 7.65% for FICA while your employer pays another 7.65%. As a freelancer, you pay both halves — the full 15.3% on the first $168,600 of net earnings (you get to deduct half of this, but it still stings). Add in self-funded health insurance ($300-$1,200/month), no paid vacation or sick days, and unbillable hours spent on administration, marketing, and invoicing (typically 20-30% of your time), and the gap between employee and freelance rates becomes enormous.
This calculator helps you convert between salary and hourly rates across all pay frequencies. Use the framework below to determine your true freelance rate: start with your target annual income, add self-employment costs, divide by your realistic billable hours, and arrive at a rate that sustains your business and lifestyle.
Key Data & Statistics
| Metric | Value |
|---|---|
| Self-Employment Tax (FICA) | 15.3% (SS 12.4% + Medicare 2.9%) |
| SE Tax Deduction | 50% of SE tax is deductible |
| Health Insurance (self-funded) | $300-$1,200/month |
| Typical Billable Ratio | 60-75% of total hours worked |
| Unbillable Admin Hours | 25-40% of work time |
| Freelance Rate Markup (vs salary) | 1.5x - 2x salaried hourly rate |
| Median US Freelance Rate | ~$40-$60/hour |
Pre-Calculated Examples
| Scenario | Gross | Net / Result | Details |
|---|---|---|---|
| Match $60K Salary | $60K target income | $48/hour freelance rate | Accounts for SE tax, insurance, 1,500 billable hrs |
| Match $80K Salary | $80K target income | $63/hour freelance rate | Accounts for SE tax, insurance, 1,500 billable hrs |
| Match $100K Salary | $100K target income | $78/hour freelance rate | Accounts for SE tax, insurance, 1,500 billable hrs |
| Match $120K Salary | $120K target income | $93/hour freelance rate | Accounts for SE tax, insurance, 1,500 billable hrs |
| Tech Freelance (senior) | $150K target income | $115/hour freelance rate | Higher insurance + retirement funding |
Calculate Your Salary
Salary Information
Enter your salary information to see all pay frequency conversions
Who Uses This Calculator?
Salary-to-freelance transition
Calculate the hourly rate you need to charge as a freelancer to match (or exceed) your current salaried total compensation including benefits.
Project pricing
Convert your hourly rate to project-based pricing by estimating total hours and adding a 15-20% buffer for scope creep and revisions.
Rate increase justification
Document the true cost of freelancing (taxes, insurance, unpaid time) to justify rate increases to clients who compare your rate to employee salaries.
Retainer structuring
Set monthly retainer amounts by calculating your hourly rate times expected monthly hours, with a 10% discount for guaranteed recurring work.