About this calculator
Most freelancers guess their rate and end up underwater. The fix is to work backwards: start from the income you want after tax, add back the taxes and the business costs you must cover, and divide by the hours you can realistically bill.
How it works
The solver iterates until the after-tax result equals your target, because both self-employment tax and income tax depend on the gross amount. Your margin is applied to business costs, so the expenses are funded before profit is counted.
Frequently asked questions
What hourly rate should I charge as a freelancer?
Enough to cover your target take-home income after self-employment tax and federal income tax, plus your business costs and a profit margin. This calculator computes that number for you. Most freelancers who price correctly land between $75 and $200 per hour depending on specialty and location.
How many billable hours should I assume?
Plan on 1,000 to 1,500 billable hours per year, not 2,000. A typical full-time year is about 2,000 working hours, but sales, admin, invoicing, and marketing consume 30 to 40% of them.
Should I raise my rate to cover the self-employment tax?
Yes. Self-employment tax adds roughly 15.3% on 92.35% of your profit, and half of that is deductible so the net effect is about 13% extra cost. A common approach is to multiply your desired take-home by 1.28.
How do I handle irregular income?
Bill on a retainer rather than per project where possible, keep a six-month reserve, and pay quarterly estimates so a large balance never lands in April. The quarterly estimated tax calculator shows the amounts.
Does this include business write-offs?
Only through the expenses field. Business expenses reduce your taxable profit, but they must be ordinary and necessary for your trade. The IRS is stricter than most freelancers assume about what qualifies.
Should I incorporate as an S corporation?
Above roughly $80,000 to $100,000 of net profit, an S-corp election can reduce self-employment tax since only your W-2 salary is subject to FICA, not distributions. It adds payroll and filing obligations, so consult an accountant first.