How This Calculator Works | Freelance Pricing Calculator

The Core Formula

Hourly Rate = (Target Income + Annual Expenses) ÷ (Working Weeks × Billable Hours/Week)

Working Weeks = 52 − Vacation Weeks
Annual Expenses = Monthly Expenses × 12
The result is rounded up to the nearest $5 for cleaner quotes

Three Rate Tiers

Survival RateBase formula result × 1.0. Covers taxes + expenses. No room to save.

Comfortable RateBase × 1.3 (+30% buffer). Savings, slow month coverage, investment.

Growth RateBase × 1.6 (+60% buffer). Room to hire, upgrade, or scale your business.

Tax Estimation

The income breakdown uses these simplified effective rates:

Federal Income Tax: 24% effective rate (assumes typical freelancer bracket with standard deduction)
Self-Employment Tax: 15.3% (Social Security 12.4% + Medicare 2.9%)
State Income Tax: Based on your selected state's flat or average effective rate

Note: 8 states have no income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.

Why 25 Billable Hours/Week?

Most freelancers spend 40–50% of their time on non-billable work: client acquisition, emails, invoicing, admin, learning, and marketing. If you work 40 hours/week, realistically only 20–25 of those are billable. Overestimating leads to underpricing.

⚠️ Disclaimer

This is a planning estimate. Actual taxes depend on deductions, filing status, business structure, and IRS rules. The rates shown are simplified effective rates, not marginal rates. Consult a CPA or tax professional for precise numbers before making financial decisions.

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