How do you calculate your freelance hourly rate?
Freelance hourly rate = (target take-home income + business expenses + taxes) / billable hours per year. A freelancer targeting $80K take-home with $10K expenses, ~30% tax burden, and 1,200 billable hours (25 hrs/week × 48 weeks) needs to bill ~$117/hour. Most freelancers under-price because they use 40 hrs/week × 52 weeks instead of realistic billable hours.
Freelance rate build-up example
| Component | Amount | Notes |
|---|---|---|
| Target take-home | $80,000 | |
| Business expenses | $10,000 | Software, hardware, coworking |
| Tax reserve (~30%) | $38,571 | Self-employment + income |
| Total revenue needed | $128,571 | |
| Billable hours/yr | 1,200 | 25/wk × 48 wks |
| Minimum hourly rate | $107 | Below this you're subsidizing clients |
How to read this table
- Total revenue needed sits at the top of the table ($128,571). If your situation looks like this row, plan against the upper half of the range rather than the midpoint.
- Minimum hourly rate anchors the bottom ($107) — below this you're subsidizing clients. Treat this as the conservative case you should still be profitable at.
- The gap between the top and bottom row is roughly 1202×. That spread is why a single blended average is close to useless here — pick the row that matches your setup instead of averaging the column.
- With 6 reference points in the "freelance rate build-up example" table, the fastest way to use this page is to find the closest row, take its amount, then stress-test it ±30% before you build a plan on it.
Context
The single biggest freelance pricing mistake is treating 40 hours/week as billable. Realistic billable hours are typically 50–70% of your workweek — the rest is admin, sales, invoicing, and unpaid rework. If you bill $75/hour on a 60% utilization schedule, your effective rate is $45.
What moves this number
Billable ratio
Freelancers bill roughly 60–70% of working hours once sales, admin, and delivery overhead is counted. Rates set on 100% utilisation always underprice.
Self-employment costs
Taxes, insurance, software, and unpaid time off add 25–40% on top of the salary you are trying to replicate.
Positioning
Specialists in a named vertical price 1.5–3× generalists doing the same technical work.
Pricing model
Hourly, day rate, project fee, and retainer produce different effective rates for identical work — project and retainer usually win.
Methodology
Standard freelance pricing formula. Tax reserve assumes US self-employment tax (15.3%) + ~15% federal + state — adjust for your jurisdiction.
Assumptions and caveats
- Rates are pre-tax and exclude self-employment costs unless a row says otherwise.
- Regional cost of living shifts these ranges substantially.
- This page was last reviewed on 2026-07-10. Ranges are updated as new data lands, so re-check before using them in a contract or a plan.
- Use these numbers as a starting range, not a guarantee — your own historical data always beats a benchmark.
Frequently asked questions
How do you calculate your freelance hourly rate?
Freelance hourly rate = (target take-home income + business expenses + taxes) / billable hours per year. A freelancer targeting $80K take-home with $10K expenses, ~30% tax burden, and 1,200 billable hours (25 hrs/week × 48 weeks) needs to bill ~$117/hour. Most freelancers under-price because they use 40 hrs/week × 52 weeks instead of realistic billable hours.
Which option pays the most in the freelance rate build-up example table?
Total revenue needed, at $128,571. That row represents the strongest case in this dataset, so use it as an upper bound rather than an expectation.
What is a realistic low-end figure?
Minimum hourly rate at $107 (Below this you're subsidizing clients). Plan your costs so the low end still works, then treat anything above it as upside.
Why do the numbers vary so much?
The spread between the highest and lowest row is about 1202×. Billable ratio and self-employment costs explain most of that gap — see the drivers section above for the full list.
Where do these numbers come from?
Standard freelance pricing formula. Tax reserve assumes US self-employment tax (15.3%) + ~15% federal + state — adjust for your jurisdiction.
How can I estimate my own number instead of using a benchmark?
Use the Freelance Rate Calculator on RevenueLab — it takes your own inputs and returns a figure specific to your setup, which is always more accurate than a published range.
Model your own numbers
More answers in this category
- How much should a freelancer charge per hour?
- How do I convert my salary to a freelance rate?
- How many billable hours can a freelancer actually work?
Last updated 2026-07-10.