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The biggest mistake freelancers make: dividing their target salary by 2,080 hours and calling that their rate. That calculation ignores self-employment tax, health insurance, unpaid time off, non-billable hours, and business expenses. Your freelance rate needs to be 40-60% higher than a salaried equivalent to net the same income.
Start with the salary converter to find your baseline rate.
Open Salary ConverterFreelance Rate = (Target Income + Taxes + Benefits + Expenses) / Billable Hours
| Component | Amount | Explanation |
|---|---|---|
| Target take-home | $70,000 | What you want in your pocket after everything |
| Self-employment tax (15.3%) | $10,710 | Both halves of Social Security + Medicare |
| Federal income tax (~15% effective) | $12,107 | On $82,817 gross (after SE tax deduction) |
| Health insurance | $7,200 | Marketplace plan, $600/month |
| Retirement savings (10%) | $8,282 | Self-funded 401k or SEP IRA |
| Business expenses | $3,600 | Software, equipment, marketing, accounting |
| Paid time off equivalent | $5,385 | 3 weeks vacation you are not billing |
| TOTAL needed gross | $117,284 | |
| Billable hours/year | 1,200 | 60% of 40-hr weeks, 50 weeks |
| YOUR HOURLY RATE | $97.74 | $117,284 / 1,200 hours |
To match a $70,000 salary with benefits, you need to charge approximately $98/hour. That sounds expensive — until you realize a $70K salaried employee costs their employer $90,000-$100,000 in total compensation.
| Salaried Equivalent | Freelance Gross Needed | Billable Hours | Freelance Hourly Rate |
|---|---|---|---|
| $40,000 | $68,000 | 1,200 | $57 |
| $50,000 | $83,000 | 1,200 | $69 |
| $60,000 | $99,000 | 1,200 | $83 |
| $70,000 | $117,000 | 1,200 | $98 |
| $80,000 | $135,000 | 1,200 | $113 |
| $100,000 | $170,000 | 1,200 | $142 |
| $120,000 | $205,000 | 1,200 | $171 |
A 40-hour work week as a freelancer does NOT mean 40 billable hours:
| Activity | Hours/Week | Annual Hours |
|---|---|---|
| Client work (billable) | 25 | 1,250 |
| Admin (invoicing, contracts, email) | 4 | 200 |
| Marketing and sales | 4 | 200 |
| Professional development | 2 | 100 |
| Vacation/sick days | N/A | -150 hours |
| TOTAL WORK | 35 | 1,550 |
| BILLABLE ONLY | 25 | 1,100-1,250 |
Most freelancers bill 1,000-1,400 hours per year. Using 2,080 in your rate calculation means you will earn 40-50% less than planned.
| Field | Entry Rate | Mid Rate | Senior Rate |
|---|---|---|---|
| Web development | $60-$90 | $100-$150 | $150-$250 |
| Graphic design | $40-$60 | $70-$100 | $100-$175 |
| Copywriting | $40-$75 | $75-$125 | $125-$200 |
| Marketing consulting | $50-$80 | $100-$150 | $150-$300 |
| Data analysis | $50-$80 | $80-$130 | $130-$200 |
| Video editing | $35-$60 | $60-$100 | $100-$175 |
| Photography | $50-$100 | $100-$200 | $200-$400 |
Start with your target salary, calculate the rate you actually need.
Open Salary Converter