How the rate is calculated
The trap most new freelancers fall into is dividing their old salary by 2,080 hours. But a freelancer's year isn't 2,080 billable hours: after client work dries up some weeks, and after marketing, proposals, bookkeeping, and email, most independents bill 50-70% of the hours they actually work. This calculator starts from the income you need, adds business expenses, and spreads the total over only the hours a client actually pays for.
The final division is the piece people forget. Employees split payroll taxes with their employer and get benefits on top of salary; freelancers pay both halves of self-employment tax and buy their own health insurance and retirement. Grossing the base rate up by your buffer means the target income is what's left after those costs - not before them.
Frequently asked questions
Why do freelance rates look so much higher than salaries?
Because the rate has to cover everything an employer normally pays for: the employer half of payroll taxes, health insurance, retirement matching, equipment, software, and paid time off - plus all the unbillable hours you spend on marketing, admin, and finding the next client. A rate that merely matches your old salary divided by 2,080 hours is a pay cut.
What if clients won't pay my rate?
Treat it as information about positioning, not proof the rate is wrong. Niching down, showing outcomes instead of hours, and targeting clients with bigger budgets usually moves the ceiling more than discounting does. Competing on price is a race to the bottom against people with lower costs than you.
Should I charge hourly or per project?
Fixed project pricing rewards you for being fast and lets you price the value of the outcome, but you carry the risk of underestimating. Hourly protects you against scope creep and open-ended revisions. Many freelancers quote fixed prices built from an internal hourly rate - this calculator gives you that number.