Freelance Hourly Rate Calculator: What Should You Charge? (2026)
Most new freelancers set their rate by dividing a salary by 2,080 hours. That leaves out self-employment tax, business costs, vacation and the hours you can’t bill. Start with the pay you want and work backward.
Estimates for education only, not tax, legal, or insurance advice.
How to price your time as a freelancer or consultant
Your hourly rate has to cover much more than your paycheck. When you work for yourself, you’re also the employer, the IT department and the sales team, and nobody pays you for vacation. Here’s what the calculator builds in.
Self-employment tax
Employees pay 7.65% for Social Security and Medicare, and their employer pays another 7.65%. When you’re self-employed, you pay both halves: 15.3% on 92.35% of your net profit, with the Social Security part stopping at $184,500 of earnings in 2026. The calculator grosses up your target pay so that what’s left after this tax matches the number you entered.
Unbillable time
Proposals, invoicing, bookkeeping, email, marketing and learning all take real hours that no client pays for. Many solo businesses bill 50% to 75% of the hours they work. Track your time for a few weeks to find your own number.
Time off and benefits
Holidays, vacation and sick days are unpaid unless your rate covers them. The same goes for health insurance and retirement savings that an employer would normally help with.
Income tax is still separate
The pay you enter is before federal and Connecticut income tax, like a salary. Set aside money for those as you’re paid. Our quarterly estimated tax calculator shows how much and when.
Sanity-check the result
- Compare with the market. If your number is far above what clients pay for similar work, look at cutting costs, raising billable hours, or offering higher-value packages.
- Consider project or monthly pricing. Once you know your hourly floor, a fixed project fee or monthly retainer often earns more, and clients like the predictability.
- Revisit yearly. Costs and taxes change. Raise rates for new clients first.
Once you’re earning steadily, an S-Corp election may lower your self-employment tax. Try our LLC vs. S-Corp calculator.
Frequently asked questions
How do I calculate my freelance hourly rate?
Add the pay you want, your business expenses, self-employment tax and a cushion. Then divide by the hours you can actually bill in a year, which is the weeks you work × hours per week × the share of hours that are billable.
Why is my freelance rate so much higher than my old hourly wage?
As an employee, your employer covered half of Social Security and Medicare, paid for equipment and benefits, and paid you for holidays and vacation. As a freelancer your rate has to cover all of that, and only part of your working hours are billable.
How much self-employment tax will I pay?
For 2026 it’s 15.3% on 92.35% of net profit up to $184,500, then 2.9% Medicare above that. A 0.9% Additional Medicare Tax applies to earnings above $200,000 for single filers.
Does this include income tax?
No. The pay you enter is before income tax, like a salary. Use the quarterly tax calculator to estimate federal and Connecticut income tax payments.
Should I charge hourly or by the project?
Hourly is simple and safe when the scope is unclear. Project or retainer pricing usually works better once you know the work well, because faster delivery means more profit rather than a smaller invoice.
Sources and assumptions (updated Oct 2026)
- SSA 2026 fact sheet: Social Security wage base $184,500.
- IRS, Self-employment tax: 15.3% (12.4% Social Security + 2.9% Medicare) on 92.35% of net earnings; no SE tax if net earnings are under $400; 0.9% Additional Medicare Tax above $200,000 (single).
- Math: profit needed = the profit P where P minus SE tax on P equals your target (pay + health insurance + retirement), solved exactly for the 2026 brackets. Revenue = (profit + expenses) × (1 + cushion). Rate = revenue ÷ ((52 − weeks off) × hours per week × billable %).
- Not included: Additional Medicare Tax, income tax, the deduction for half of SE tax, and health insurance or retirement deductions, which lower income tax, not SE tax. The defaults (65% billable, 6 weeks off, 10% cushion) are example inputs, not industry statistics.
Estimates for education only, not tax, legal, or insurance advice.
Questions about your numbers? Talk them through with a Danbury tax preparer, free for 15 minutes.