💰 Income & Expenses
📅 Your Time
📊 Your Rates
Know your rate? Now send a professional invoice.
Create Free Invoice →How to Calculate Your Freelance Rate
Most freelancers undercharge because they compare their rate to a salary without accounting for all the hidden costs of self-employment. Here's the right way to think about it:
Step 1: Start With Your Desired Take-Home Pay
This is what you actually want in your bank account after everything else is paid. If you'd earn $80,000 at a full-time job, start there — but remember, you're giving up benefits like health insurance, retirement matching, and paid time off.
Step 2: Add Your Business Expenses
As a freelancer, you pay for things an employer would normally cover:
- Software and tools ($100-500/month)
- Health insurance ($200-800/month in the US)
- Accounting and legal ($500-3,000/year)
- Equipment, internet, phone
- Coworking space or home office
- Professional development and training
Step 3: Account for Taxes
Freelancers typically pay more in taxes than employees because you cover both the employer and employee portions of payroll taxes. In the US, budget 25-35% for combined self-employment tax and income tax.
Step 4: Calculate Your Actual Billable Hours
This is where most freelancers get the math wrong. You don't bill 40 hours a week, 52 weeks a year. Account for:
- Vacation and sick days — 2-4 weeks/year minimum
- Non-billable work — marketing, admin, invoicing, proposals, meetings — typically 20-40% of your time
A realistic number for most freelancers is 1,000-1,400 billable hours per year.
Average Freelance Rates by Industry
| Industry | Beginner | Mid-Level | Expert |
|---|---|---|---|
| Web Development | $40-60/hr | $75-120/hr | $150-250/hr |
| Graphic Design | $30-50/hr | $60-90/hr | $100-175/hr |
| Copywriting | $25-45/hr | $50-80/hr | $100-200/hr |
| Marketing Consulting | $40-65/hr | $80-130/hr | $150-300/hr |
| Video Production | $35-55/hr | $65-100/hr | $120-250/hr |
| Photography | $30-50/hr | $75-125/hr | $150-350/hr |