Freelance Hourly Rate Calculator
Tax year: 2026 · Last updated 2026-06-21 · Source: IRS
Reviewed by Dr. Julian Vance, co-founder, lead data architect & primary author · 2026-06-21
What you want to actually pocket each year, after federal taxes.
e.g. 48 = 52 minus 4 weeks off
Hours billed to clients (not total hours worked)
Health insurance, gear, and other personal costs your income must cover.
Minimum hourly rate to charge
$61.82
$89,016 gross revenue needed · 1,440 billable hours/yr
How this calculator figures out your hourly rate
Setting a freelance rate comes down to two things: how much you need to earn gross to reach your take-home goal, and how many hours you can actually bill in a year. The calculator solves both.
Step 1 — figure out the gross you need
Federal taxes take a real chunk of freelance income. At $80,000 net profit, a single filer pays roughly $11,000 in self-employment tax and $8,000 or so in income tax. To target a specific take-home, the calculator works backwards using your filing status and the 2026 tax brackets to find the gross revenue that produces your target net after all federal taxes.
Any overhead you enter is added to the gross target — you need to earn enough to cover both taxes and those costs before anything hits your pocket.
Step 2 — figure out your billable hours
Billable hours per year = weeks per year × hours per week you bill clients. A simple adjustment: if you work 50 weeks and bill 30 hours each week, that is 1,500 billable hours. The calculator uses whatever numbers you enter — adjust them to match your real schedule.
Step 3 — hourly rate = gross ÷ billable hours
Once you know the gross revenue you need, dividing by billable hours gives you the minimum rate to charge. Round up in practice — rates rarely go down mid-year, and projects often take longer than quoted.
A worked example
A single freelancer wants to take home $70,000 per year, works 48 weeks, bills 30 hours per week (1,440 billable hours), and has $2,400 in annual overhead:
- Total net needed: $70,000 + $2,400 = $72,400
- Gross needed (after ~27% effective tax rate): roughly $99,000
- Hourly rate: $99,000 ÷ 1,440 ≈ $69/hr
At $65/hr (a common round number) they would come up short by about $5,000. Small rate gaps compound over a full year — this calculator helps you catch them before you commit to a number.
This is a federal estimate only. Add your state income tax rate on top. The QBI deduction is applied when your taxable income is under the IRS threshold, which meaningfully reduces the gross you need to earn.
Sources
Frequently asked questions
How do I figure out what hourly rate to charge as a freelancer?+
Start with how much you want to take home after taxes, then work backwards. Add your federal tax burden and any overhead, then divide by the hours you actually bill clients in a year. Most freelancers bill fewer hours than they work — admin, sales, and unpaid time eat into a full schedule. This calculator does that math for you.
How many billable hours can a freelancer realistically work in a year?+
A common estimate is 1,200 to 1,400 billable hours per year — that is 30 to 35 hours per week for 48 weeks (leaving about a month for vacation, sick days, and slow periods). If you work 40-hour weeks and bill all of them, that's around 1,920 hours, but most freelancers find 70 to 80% utilization is realistic once you account for admin, business development, and gaps between projects.
What tax rate should I plan for as a freelancer?+
At $60,000 to $100,000 in net profit, most single freelancers pay roughly 25 to 30% in combined federal taxes (self-employment tax plus income tax). The calculator uses your filing status and the actual 2026 brackets to compute the right number for your situation rather than a rough estimate.
Should I charge more as a contractor than a salaried employee would earn?+
Yes. Contractors pay both halves of Social Security and Medicare tax, get no paid benefits, and have gaps between projects. A common rule of thumb is to charge at least 20 to 30% more than the equivalent W2 salary to come out even after taxes. Use the 1099 vs W2 calculator on this site to find the exact break-even rate for your situation.
What overhead should I include in my rate?+
Overhead in this calculator means non-deductible personal expenses that your freelance income has to cover — health insurance premiums (if you can't deduct them), retirement contributions from after-tax income, equipment you can't write off, and similar costs. Deductible business expenses like software subscriptions or a home office reduce your net profit for tax purposes and are handled separately.
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