What should you
charge?
Calculate your ideal freelance rate based on target income, billable hours, business expenses, and taxes. So you stop undercharging.
Tell us about your business
Why most freelancers undercharge.
The math you forget
If your "target salary" is $80,000, the actual hourly rate to hit that take-home is much higher than $80,000 ÷ 2,000 = $40. You also need to cover:
- ~30% combined federal + state + SE tax (varies by state)
- Annual business expenses ($5k-$30k+ depending on profession)
- Non-billable time (admin, sales, training, breaks)
- Health insurance (no employer subsidy)
- Retirement (no employer match)
The realistic multiplier from "W-2 salary equivalent" to freelance hourly rate is roughly 2-3x. So $80k W-2 = $80-$120/hr freelance, not $40/hr.
The 25-hour rule
A 40-hour work week doesn't mean 40 billable hours. Realistic billable hours for most freelancers: 20-28 per week. Plan around 25 to leave buffer for sales, admin, training.
The vacation rule
Freelancers don't get paid time off. If you take 4 weeks vacation + 1 week sick + holidays, you have ~46 working weeks. That's already 12% less revenue than 52 weeks.