What is self-employment tax?

Self-employment tax (15.3%) covers Social Security and Medicare. It's paid on 92.35% of your net self-employment income.

What is the QBI deduction?

The Qualified Business Income (QBI) deduction allows you to deduct up to 20% of your qualified business income, subject to income limitations.

When are quarterly estimated taxes due?

Quarterly taxes are due April 15, June 15, September 15, and January 15 of the following year.

What business expenses can I deduct?

You can deduct ordinary and necessary business expenses including home office, equipment, software, travel, meals (50%), and professional development.

Gig Economy Calculators

Freelancer Rate Calculator

Calculate freelance hourly rates based on target income and billable hours with comprehensive business expense analysis for independent contractors. Features detailed rate breakdown including overhead costs (software, equipment, insurance), profit margin targets, self-employment tax considerations (15.3% FICA), vacation and sick time accounting, billable vs non-billable hour ratios, annual income projections, and competitive rate comparisons to ensure sustainable freelance business pricing and profitability.

How to Use the Freelancer Rate Calculator

Use the Freelancer Rate Calculator to freelance hourly rates based on target income and billable hours with comprehensive business expense analysis for independent contractors. Features detailed rate breakdown including overhead costs (software, equipment, insurance), profit margin targets, self-employment tax considerations (15.3% FICA), vacation and sick time accounting, billable vs non-billable hour ratios, annual income projections, and competitive rate comparisons to ensure sustainable freelance business pricing and profitability.. Enter your values to get accurate, instant results tailored to your situation.

Free gig economy calculators for freelance income, taxes, expenses, and earnings optimization. Maximize your independent work.

Common Uses

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Freelancer Rate Guide

Price your services right

Expert Tips

Your Rate = Salary ÷ 1,000 (Minimum): To match a $100K salary, charge $100/hour minimum. This accounts for self-employment taxes (15.3%), health insurance, no paid time off, and business expenses. Many freelancers undercharge by 40-60%.
Value-Based Pricing Beats Hourly: A logo design taking 5 hours shouldn't cost $500 if it's worth $50K to the client's brand. Price based on client value, not your time. Project-based pricing lets you capture more value as you get faster.
Raise Rates Every Year: Increase rates 10-20% annually or you're effectively taking a pay cut (inflation). Existing clients get grandfather pricing; new clients pay new rates. If no one pushes back on price, you're too cheap.
Bill for 1,000-1,200 Hours, Not 2,080: You can't bill 40 hours/week—marketing, admin, invoicing, and vacation eat time. Realistic billable hours: 20-25/week = 1,000-1,300/year. Your hourly rate must cover unbillable time.

Essential Fundamentals — Rate calculation basics

Rate Components

Base Salary Equivalent: What would you earn as an employee? Add 25-40% for benefits you now pay yourself: health insurance ($500-1,500/month), retirement (15% of income), self-employment tax (15.3%). $80K salary = $100K-112K freelance equivalent.
Overhead and Expenses: Software, equipment, office space, professional development, insurance. Budget $5K-20K/year depending on your field. This must be covered by your rates, not absorbed from profit.
Profit Margin: You're running a business, not just replacing a job. Build in 15-30% profit beyond salary equivalent. This funds growth, provides emergency buffer, and rewards your entrepreneurial risk.

Advanced Strategies — Maximize earnings

Pricing Optimization

Tiered Service Packages: Offer basic, standard, and premium tiers. Anchor with high-priced premium option to make standard look reasonable. Most clients choose middle tier—price it where you want most business.
Retainer Agreements: Offer 10-20% discount for guaranteed monthly hours. Retainers provide predictable income and client commitment. Require 3-6 month minimums to make discounts worthwhile.

Frequently Asked Questions

What is self-employment tax?: Self-employment tax (15.3%) covers Social Security and Medicare. It's paid on 92.35% of your net self-employment income.
What is the QBI deduction?: The Qualified Business Income (QBI) deduction allows you to deduct up to 20% of your qualified business income, subject to income limitations.
When are quarterly estimated taxes due?: Quarterly taxes are due April 15, June 15, September 15, and January 15 of the following year.
What business expenses can I deduct?: You can deduct ordinary and necessary business expenses including home office, equipment, software, travel, meals (50%), and professional development.