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What Should You Charge Per Hour?

Most people set a freelance rate by taking the salary they want and dividing by 2,080. That number is always too low, because it ignores self-employment tax, expenses, and every hour you work but cannot bill. This starts from what you want to keep and works backwards.

$
hrs
wks
$
Charge at least
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Revenue you need
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for the year
The naive rate
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salary ÷ 2,080
--
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How the rate is built
Amount
What you want to keep
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Federal income tax
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Self-employment tax
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Business expenses
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Revenue you have to invoice
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Billable hours per year
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Minimum hourly rate
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Charging by the hour caps you. Pricing by the project does not.
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Federal figures only, using 2026 rates. It solves for the revenue that leaves you with your target income after self-employment tax, federal income tax and business expenses. It does not include state or local income tax, health insurance premiums, retirement contributions, the self-employed health insurance deduction, or credits. Nothing here is reserved for unpaid time off or gaps between clients. Estimates only, not tax advice.