Everhour’s freelance rate guide works through an example in which a freelancer wants 90,000 dollars a year, adds 17,500 dollars of overhead, 16,250 dollars for benefits and 28,750 dollars for taxes, divides the 152,500 dollar total by 1,525 billable hours, and lands on 100 dollars an hour. The lesson is that a freelance rate calculator needs more inputs than the salary you want.
This guide shows how to price your work step by step: the formula, the self-employment tax inputs, how to estimate billable hours and how to turn an hourly rate into a project price. It draws on Everhour and Beancount.io. Figures are for US freelancers and are examples, so check current tax rules and market rates, and talk to a tax professional.
The Freelance Rate Formula
Everhour’s method is a cost-plus formula. Work out what you need to earn in a year, divide by the hours you can realistically bill, and you have the lowest hourly rate that keeps your business healthy.
| Step | What to include | Everhour example |
|---|---|---|
| 1. Income target | What you want to keep before personal taxes | 90,000 dollars |
| 2. Overhead | Software, insurance, equipment, accounting, marketing, workspace | 17,500 dollars |
| 3. Benefits substitute | Health cover, retirement and paid time off you now fund yourself | 16,250 dollars |
| 4. Tax reserve | Self-employment and income taxes, plus state taxes | 28,750 dollars |
| 5. Annual cost base | Add steps 1 to 4 | 152,500 dollars |
| 6. Billable hours | A realistic number, not 2,080 | 1,525 hours |
| 7. Hourly rate | Cost base divided by billable hours | 100 dollars |
Every figure in the example is an illustration. Replace them with your own.
Self-Employment Tax: The Input Many Freelancers Miss
Beancount.io explains that US self-employment tax for 2026 is 15.3 percent, made up of 12.4 percent for Social Security, which applies only up to a wage base of 184,500 dollars, and 2.9 percent for Medicare, which has no cap. You can deduct half of it when working out adjusted gross income, which reduces income tax but not the self-employment tax itself.
| Quarterly estimated payment date (Beancount.io) | Income period |
|---|---|
| April 15, 2026 | January to March |
| June 15, 2026 | April to May |
| September 15, 2026 | June to August |
| January 15, 2027 | September to December |
Tax rules vary by country and situation. If you freelance outside the US or have a complex return, talk to a qualified tax professional. For irregular income, our guide on how to budget when your income is irregular can help you set aside money for taxes.
How to Estimate Billable Hours Honestly
Everhour says not to use 2,080 hours, the number of hours in a standard full-time year, because freelancers also spend time on proposals, revisions, collections, bookkeeping, training, unbilled calls and gaps between projects. Its example uses 1,525 hours.
| Time use | Billable? |
|---|---|
| Client work | Yes |
| Proposals and sales calls | No |
| Revisions beyond scope | Often no |
| Bookkeeping and invoicing | No |
| Training and learning | No |
| Gaps between projects | No |
Track your time for a month to see your real ratio. Many freelancers find that billable time is well below their total working time.
From Hourly Rate to Project Price
Multiply your estimated hours by your rate to get a cost check. Everhour’s example is a 100 dollar hourly floor on a 30 hour project, which gives a 3,000 dollar minimum.
| Project | Estimated hours | Rate (example) | Minimum price |
|---|---|---|---|
| Small website update | 10 | 100 dollars | 1,000 dollars |
| Brand identity | 30 | 100 dollars | 3,000 dollars |
| Monthly retainer | 20 per month | 100 dollars | 2,000 dollars per month |
Add a buffer for revisions and scope changes, and state in your contract what is included.
Check Your Rate Against the Market
Everhour says to compare your floor with market data, and cites a 2023 Fiverr survey average US hourly rate of 93 dollars and Upwork 2026 profile bands of 75 to 150 dollars or more for specialised work. It also notes the page may not be fully up to date.
If your floor is higher than comparable professionals charge, change the scope, packaging or costs, rather than dropping below the floor. Specialising, bundling services and charging by project value can all lift income without more hours.
Raise Your Rates Without Losing Clients
Give existing clients notice, explain what is changing and keep the old rate for a short period if you value the relationship. Use your new rate for every new client straight away.
Review your rate each year with your year-end numbers. Rising costs, new skills and better results all justify a higher price.
