How it works
This calculation gives you a floor — the rate below which freelancing leaves you worse off than a salaried job. Charge more than the floor, not less. If the result feels high, the right move is usually to fix one of the inputs (cut expenses, raise billable percentage) rather than discount.
Worked example
You want $80,000 in your pocket after a 30% effective tax rate, with $8,000 in business expenses. You work 40 hours × 46 weeks at 65% billable.
- Required gross = ($80,000 + $8,000) ÷ 0.70 = $125,714
- Billable hours = 40 × 46 × 65% = 1,196 hours
- Hourly rate = $125,714 ÷ 1,196 ≈ $105/hour
- Day rate (8 hrs) ≈ $840
FAQ
Should I quote hourly or fixed-price?
Use this calculator's hourly rate as your floor, then quote fixed-price for predictable scopes (clients prefer it, you keep efficiency gains). For exploratory or open-ended work, hourly protects you from scope creep.
What if I'm just starting out?
Your floor is still your floor. New freelancers often discount themselves into unprofitability — a better strategy is to charge market rates but offer a smaller initial scope so the dollar amount feels less risky to a new client.
How is this different from salary-to-hourly?
The salary-to-hourly calculator divides salary by hours to compare what an employee earns. This calculator works backward from a take-home goal and adds the cost of being self-employed (expenses, taxes, non-billable time) — apples to oranges.