Frequently Asked Questions
How do I calculate my freelance hourly rate?
Start with your desired annual take-home pay. Add self-employment taxes (15.3%), income taxes, health insurance, retirement savings, business expenses, and a profit margin. Then divide by your realistic billable hours per year (typically 1,200โ1,500 hours, not 2,080). This gives you the minimum hourly rate you should charge.
What is a good freelance hourly rate?
There's no one-size-fits-all answer. A web developer in San Francisco might charge $150โ250/hour, while a graphic designer in a smaller market might charge $50โ100/hour. The key is to calculate YOUR number based on your expenses, taxes, and income goals โ not to guess based on what others charge.
Should I charge hourly or project-based rates?
Most experienced freelancers recommend project-based pricing because it rewards efficiency. However, you still need to know your hourly rate as a baseline. Calculate your hourly minimum with this tool, then estimate how many hours a project will take, add a buffer, and quote that as your project rate.
Why do freelancers need to charge more than employees?
Employees receive benefits worth 25โ40% of their salary (health insurance, retirement matching, paid time off, disability insurance, employer-paid taxes). As a freelancer, you pay for all of this yourself. You also have business expenses (software, equipment, accounting) and unbillable time for admin, marketing, and finding clients. A $50/hour employee actually costs their employer $65โ70/hour โ so that's your real comparison point.
What is self-employment tax?
Self-employment tax is the Social Security (12.4%) and Medicare (2.9%) tax that freelancers pay. When you're an employee, your employer pays half. When you're self-employed, you pay the full 15.3% on your net earnings. On $85,000 of income, that's about $13,000 in additional taxes most people forget to account for.
How many hours should I expect to bill per week?
Most full-time freelancers bill 25โ30 hours per week. The remaining time goes to finding clients, writing proposals, invoicing, bookkeeping, marketing, professional development, and general admin. If you're just starting out, 20โ25 billable hours per week is more realistic until you build a steady client base.