FREE CALCULATOR
Start from the income you want to take home and work backward to the hourly rate that actually gets you there — after expenses, time off, unbillable hours and taxes.
Numbers are estimates for planning, not tax advice. Your real tax set-aside depends on your bracket, state and deductions — see the self-employment tax set-aside calculator or ask a tax professional.
You are not paid for every hour you work. Quoting, invoicing, emailing, driving between jobs, buying materials and looking for the next client are all real work — and none of it goes on an invoice. Many freelancers and contractors bill only 50–75% of the hours they work. If you divide your target income by 2,080 hours (40 hours × 52 weeks) you will under-charge by a third or more, because the hours you can actually bill are far fewer.
Revenue is not income. Before you take anything home, the money has to cover business expenses (tools, software, insurance, vehicle), taxes, and ideally a small buffer for slow months and equipment that wears out. That is why this calculator works backward: take-home plus expenses, grossed up for taxes, plus a buffer, spread across the hours you can really bill. The result is a minimum — the rate at which you break even on your life, not a ceiling. Charge more when the market or the job allows it.
Turn your rate into real quotes: a rates library for materials and labor, estimates priced by target margin with overhead included, a client-ready quote, and estimate-vs-actual job costing. Excel and Google Sheets.
Add the take-home income you want and your business expenses, divide by (1 minus your tax set-aside %), add a profit buffer, then divide by the number of hours you can realistically bill in a year.
Many freelancers and contractors bill roughly 50-75% of the hours they work, since quoting, admin and travel are unbillable. Track a few weeks of real time to find your own number.
No. 25% is only a placeholder. Your actual taxes depend on your income, state and deductions, so check with a tax professional.
Free to use, no sign-up. Built by Gragg Robotics, LLC in Waterville, Maine. More free tools: all calculators.