How Much Should You Charge as a Freelancer?

Ask a new freelancer what they charge and you'll usually hear a number they made up — often copied from someone with five years more experience, or lowballed out of fear. There's a better way: work backwards from the life you need the rate to fund.

The formula

Hourly rate = (annual income goal + annual expenses + taxes) ÷ billable hours per year

Let's run it with realistic beginner numbers.

Step 1: Your income goal + expenses

Say you want to take home $60,000/year freelancing. Add business expenses: software, accounting, health insurance, a laptop fund — beginners typically spend $5,000–8,000/year. Let's use $6,000.

Subtotal: $66,000.

Step 2: Account for taxes

Freelancers pay self-employment tax on top of income tax. A rough planning figure in the US is 25–30% of profit. To keep $66,000 after a 25% effective tax rate, you need to earn $66,000 ÷ 0.75 = $88,000.

(Talk to an accountant for your real numbers — this is planning math, not tax advice.)

Step 3: Billable hours (the part everyone gets wrong)

You don't bill 40 hours a week. Between marketing, admin, and gaps between clients, most freelancers bill 20–25 hours/week. And you won't work 52 weeks — subtract 4 weeks off.

20 billable hrs × 48 weeks = 960 billable hours/year.

Step 4: The rate

$88,000 ÷ 960 hours = $91.67/hour.

Round to $90/hour. That's your floor — the rate below which the math doesn't work.

Sanity checks

• Day rate: hourly × 8 = $720/day. Quote day rates for larger projects; clients anchor better on them.
• Project minimum: never take a project under 2–3 hours of pay. A $90/hr rate with a $250 minimum filters out draining micro-gigs.
• Raise it yearly: your expenses grow and your skills compound. Revisit the formula every 12 months.

"But nobody will pay that"

Someone getting started often feels $90/hr is audacious. Two things: first, clients aren't buying your hours, they're buying an outcome — a $90/hr writer who delivers a landing page that converts is cheap. Second, underpricing attracts the worst clients. The freelancers who last are the ones whose rates fund a sustainable business, not the cheapest ones.

Run your own numbers with our freelance rate calculator — enter your income goal and availability, and it computes your hourly rate, day rate, and project minimum.