How Much Should You Charge as a Freelancer or Consultant?
Most freelancers undercharge because they price like an employee. Here is how to calculate a rate that actually covers your goals — taxes, expenses, and downtime included.
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:
- Start with your target take-home income.
- Add business expenses.
- Divide by (1 − your tax rate) to get required revenue.
- 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 least you can charge to hit your goal. What you actually charge should be based on the value you deliver, which is usually far higher — more on that in value-based pricing.
Want the full system?
Start Your Business turns these ideas into a step-by-step plan, with interactive tools and a clear path from where you are to where you want to be.