How Much Should You Charge as a Freelancer or Consultant?

The most common freelancing mistake is setting your rate by halving a salary. That math quietly bankrupts you, because as your own boss you carry costs an employee never sees.

Why "salary ÷ 2,080" is wrong

A $100,000 salary is not $48/hour for a freelancer. You must cover:

• Self-employment taxes (you pay both halves)
• Business expenses (software, equipment, insurance)
• Non-billable time (sales, admin, learning — often 30–40% of your week)
• No paid time off — vacations and sick days are unpaid

The right calculation

Work backwards from what you need to take home:

1. Start with your target take-home income.
2. Add business expenses.
3. Divide by (1 − your tax rate) to get required revenue.
4. Divide by your realistic billable hours per year — not 2,080, but the hours you can actually bill after sales, admin, and time off.

That last step is the killer: if you can only bill ~25 hours a week for ~48 weeks, that is ~1,200 billable hours, not 2,080. Spreading your needed revenue over half the hours roughly doubles the rate you must charge.

See your real number

The free Rate Calculator does this for you — enter your income goal, expenses, tax rate, and honest billable hours, and it shows the minimum hourly, day, and project rate you need.

This is your floor, not your price

The calculated rate is the you can charge to hit your goal. What you actually charge should be based on the , which is usually far higher — more on that in .