What is this?
A freelance rate calculator helps you convert your desired annual salary into an hourly freelance rate that accounts for overhead costs, taxes, and profit margin. Unlike salaried employees, freelancers must cover their own health insurance, retirement contributions, equipment, software subscriptions, and self-employment taxes (15.3%). The 1.5-2x rule suggests multiplying your salaried hourly rate by 1.5-2x, but this often underestimates true costs. A precise calculation accounts for your actual overhead and desired profit.How to use
Enter your desired annual income (equivalent to a salary), set realistic billable hours per week (25-35 is typical, not 40, due to admin work), add your annual overhead costs like health insurance, software, equipment, and coworking space (typically 20-40% of income), set a profit margin of 10-20% for business growth and cushion, and account for self-employment tax (15.3%) plus federal/state income tax (total 25-35%). The calculator shows three rate tiers: minimum (covers salary only), target (adds overhead and taxes), and recommended (adds profit margin).Tips
- **Billable vs Total Hours**: Out of 40 hours/week, only 25-35 are typically billable. The rest is admin, marketing, learning
- **Overhead Examples**: Health insurance ($500-1,000/mo), software ($100-300/mo), equipment ($2,000-5,000/year amortized)
- **Quarterly Taxes**: Set aside 25-35% of all income for quarterly tax payments to avoid penalties
- **Vacation Buffer**: Freelancers don't get paid time off. Work 48 weeks (4 weeks vacation) or 50 weeks (2 weeks)
- **Rate Ranges**: Junior: $50-75/hr, Mid: $75-125/hr, Senior: $125-200/hr, Expert: $200-500/hr (varies by field)
- **Minimum Rate**: Never go below your minimum rate (covers salary only). Target and recommended rates ensure sustainability
