About This Calculator
FreelanceRateCalculator.org provides a free, comprehensive tool to help freelancers determine their ideal hourly rate. Here's how it works and why you can trust the results.
Our Mission
We built this calculator because too many freelancers undercharge. They don't account for taxes, expenses, and non-billable time, leading to burnout and financial stress. Our goal is to help every freelancer understand their true costs and price their services sustainably.
Calculation Methodology
Our rate calculator uses a reverse-engineering approach to determine the hourly rate needed to achieve your income goals. The formula accounts for:
- Desired Take-Home Income: What you want in your pocket after taxes and expenses
- Business Expenses: Monthly costs multiplied by 12
- Tax Burden: Self-employment tax (15.3%) + federal income tax (progressive brackets) + state income tax
- Billable Hours: Working weeks × hours per week
The calculator uses an iterative algorithm to solve for the gross revenue needed, accounting for the fact that taxes are calculated on gross income. It converges on an accurate solution within 10 iterations.
Tax Calculation Details
We use current 2025 tax data:
- Self-Employment Tax: 15.3% on 92.35% of net earnings (Social Security 12.4% up to $176,100 cap + Medicare 2.9% uncapped + 0.9% Additional Medicare Tax above $200,000)
- Federal Income Tax: 2025 brackets for single filers, with standard deduction of $15,000 and SE tax deduction
- State Income Tax: Flat or approximate effective rates for all 50 states and DC
Note: Actual taxes vary based on filing status, deductions, credits, and other factors. Our estimates are for planning purposes only.
Market Rate Data Sources
Our industry benchmarks come from reputable sources:
- Upwork: Data from 12M+ freelancers on the world's largest freelance marketplace
- PayScale: Compensation data from HR professionals and job seekers
- Glassdoor: Employee-reported salary and freelance rate data
- FreelancerMap: IT-specific freelancer rate indices
- Clockify: Time-tracking platform with hourly rate research
Currency Exchange Rates
For non-USD calculations, we use the Frankfurter API, which provides European Central Bank exchange rates. Rates are fetched in real-time when you load the calculator, with fallback to recent rates if the API is unavailable.
Data Privacy
All calculations happen locally in your browser. We don't store, transmit, or have access to any data you enter. Your financial information never leaves your device. See our Privacy Policy for details.
Updates & Accuracy
We update the calculator annually to reflect:
- New federal tax brackets and standard deduction amounts
- State tax rate changes
- Social Security wage base updates
- Current market rate benchmarks
Last update: January 2025
Limitations
This calculator provides estimates for planning purposes. It does not account for:
- Itemized deductions or business structure optimizations (S-Corp, LLC)
- State-specific deductions and credits
- Local/city taxes (relevant in NYC, some PA cities, etc.)
- Quarterly estimated tax payment requirements
- Marriage filing status or dependents
For accurate tax planning, consult a qualified tax professional.