Freelance Rate Calculator: What You Actually Need to Charge to Make It Work

Most freelancers undercharge. Not because they lack confidence or negotiating skill — because they calculate their rate incorrectly.

The employee equivalent of a $75,000 salary is not a $75,000 annual freelance revenue target. Not even close.

What Full-Time Employment Actually Costs Your Employer (And What You Now Pay)

When you're employed, your employer pays:

• Employer portion of FICA (7.65% of wages)
• Health insurance (average employer contribution: $7,000-15,000/year for individual coverage)
• Paid vacation and holidays (2-3 weeks = 4-6% of your compensation)
• Retirement contribution match (often 3-6% of salary)
• Workers comp and unemployment insurance

As a freelancer, you pay all of this yourself — or you go without. The self-employment tax alone (both halves of FICA) adds 14.13% to your effective tax rate.

The Honest Rate Calculation

Start with your target take-home income. Add:

• Self-employment taxes (~15% on top)
• Health insurance premiums (~$5,000-12,000/year)
• Retirement savings (if you want to save what an employer match would have provided)
• Paid time off you won't bill (2-3 weeks)
• Business expenses (software, equipment, accounting)
• Slow months / non-billable time (typically 20-30% of hours)

The resulting number — your required annual revenue — divided by your actual billable hours, gives you your minimum viable rate.

For most freelancers replacing a $75,000 salaried position, the minimum rate works out to $65-90/hour depending on benefits and billable utilization.

[Calculate your freelance rate →](https://doesitaddup.com)

This article is for informational purposes only. See our disclaimer.