Freelancer Contract Rate Calculator
Calculate a sustainable freelance hourly or project rate.
Factor in taxes, overhead, desired salary, and billable hours to price contracts accurately.
Freelancer contract rate vs. salary comparison is essential because a freelance hourly rate must compensate for benefits, taxes, downtime, and business expenses that a salaried employee receives automatically. A $50/hour freelance rate is NOT equivalent to a $50/hour salaried position.
Equivalent salary formula: Equivalent Salary = Hourly Rate × Billable Hours per Year Billable Hours per Year = Total Work Hours − Unbillable Time
Typical unbillable time for freelancers (out of 2,080 annual hours):
- Business development / proposals: 15–20%
- Admin, invoicing, meetings: 10%
- Unpaid gaps between contracts: 10–20%
- Effective billable rate: ~60–70% of total hours
True cost comparison (what you need to earn to match salary):
| Salary Benefit | Annual Value |
|---|---|
| Health insurance (self-pay) | $7,000–$15,000 |
| Dental + vision | $1,500–$3,000 |
| Employer 401k match (typical 3%) | $1,500–$3,000 |
| Self-employment tax extra burden | ~7.65% of income |
| Paid vacation (15 days) | ~5.8% of salary |
| Sick days (10 days) | ~3.8% of salary |
| Total benefits premium | ~$15,000–$25,000+ |
Required freelance rate formula: Required Rate = (Desired Take-Home Salary + Benefits Cost + SE Tax Premium + Business Expenses) ÷ Billable Hours
Worked example: Desired salary equivalent: $80,000/year. Benefits premium: $18,000. Business expenses: $5,000. SE tax extra burden: $80,000 × 0.0765 = $6,120. Total needed: $80,000 + $18,000 + $5,000 + $6,120 = $109,120 Billable hours: 2,080 × 0.65 = 1,352 hours Required hourly rate = $109,120 / 1,352 = $80.71/hour
This means a $50/hour freelance rate is equivalent to approximately a $44,000 salary — not $104,000.
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
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