Freelance Hourly Rate to Salary Calculator
Convert your hourly freelance rate to an equivalent annual salary — after self-employment tax, federal and state income tax, healthcare, and business overhead. Or reverse it: find the hourly rate you need to match a target salaried income.
Equivalent Salaried Value
Gross Revenue
$138,000
SE Tax
$19,499
Income Tax
$37,260
Healthcare
$7,500
Net Take-Home
$73,741
Effective Net/hr
$40.08
Common Freelance Rate Benchmarks
| Role | Hourly Range | Salary Equiv. |
|---|---|---|
| Web Developer (mid) | $60–$120 | $130k–$270k |
| Designer (UX/UI) | $50–$100 | $110k–$225k |
| Copywriter | $40–$80 | $90k–$180k |
| Marketing Consultant | $75–$150 | $170k–$340k |
| Data Scientist | $90–$180 | $200k–$400k |
Uses a 46-week billable year (accounts for vacation, sick leave, public holidays). Federal rates applied; adjust state tax for your location. Overhead includes tools, accounting, insurance, and non-billable admin time.
The real cost of going freelance
The popular “divide your salary by 2,000” rule — used to convert annual salary to an hourly rate — dramatically understates what freelancers need to charge. A salaried employee on $100,000 costs their employer closer to $130,000–$140,000 once payroll taxes, healthcare, 401k match, equipment, and office space are factored in. When you go independent, you absorb all of that cost yourself.
Then add self-employment tax. Employees pay 7.65% FICA; freelancers pay 15.3% on top of income tax, because there's no employer to split it with. The combined federal, SE, and state effective rate for a $75,000 net income freelancer can easily exceed 35–40%.
Rate benchmarks by role (US, 2025)
| Role | Typical Rate | Salary Equiv. |
|---|---|---|
| Full-Stack Developer (mid) | $75–$130 | $130k–$200k |
| Product Designer / UX | $60–$110 | $100k–$175k |
| Copywriter / Content | $50–$90 | $85k–$145k |
| Performance Marketer | $70–$140 | $120k–$220k |
| Data Engineer | $95–$175 | $160k–$280k |
| Business / Strategy Consultant | $120–$250 | $200k–$400k |
Salary equivalent ranges use this calculator's defaults. Your actual number depends on how many billable hours you actually close, your state's income tax, and whether you have dependants affecting healthcare costs.
Build recurring revenue alongside client work
The risk of pure freelancing is lumpy income — a slow month can wipe out a great quarter. The compounding play is to build a product or content asset that generates recurring revenue. Check our SaaS churn calculator to model product economics, and our runway calculator to know how long your client income keeps the lights on while you build. Once your product is live, list it on Launchory for a permanent dofollow backlink and ongoing organic discovery.
Frequently asked questions
Why does $75/hr not equal a $156,000 salary?
Because freelancers pay self-employment tax (15.3% on the first $168,600), both halves of FICA, income tax, and have no employer subsidising benefits, office space, or equipment. After a 15.3% SE tax, 22% federal income, 5% state income, and $7,500 in healthcare, a $75/hr freelancer taking 40 billable hours/week over 46 weeks nets roughly $106,000 — equivalent to a salaried package of about $145,000–$155,000 when you include employer-side FICA and benefits.
What is self-employment tax and how much is it?
Self-employment tax is the freelancer's equivalent of FICA — Social Security (12.4%) and Medicare (2.9%). Employees split this with their employer (each paying 7.65%), but freelancers pay the full 15.3% themselves on net self-employment income. The Social Security portion caps at $168,600 of net income in 2024; above that you pay only the 2.9% Medicare portion. You can deduct half of SE tax from your federal taxable income.
How many billable hours per year is realistic?
This calculator uses 46 billable weeks (40 available weeks × 40h). That accounts for 2 weeks of vacation, 1 week sick leave, and 1 week of public holidays — a conservative but realistic estimate. Many freelancers only achieve 25–35 billable hours per week even when fully booked, because meetings, proposals, invoicing, and marketing aren't billable.
What should I include in overhead?
Business overhead is everything that costs money but isn't directly billable: accounting and legal fees, business banking, professional liability insurance, SaaS subscriptions (design tools, project management, invoicing), hardware depreciation, your home office, professional development, and the ~20–30% of your working hours spent on non-billable admin. A 20–30% overhead add-on is a common starting point; higher for specialised work requiring expensive tooling or certification.
What hourly rate do I need to match a $120,000 salary?
Using this calculator's defaults (40 hrs/week, 46 weeks, 20% overhead, 15% profit, 5% state tax, healthcare included), you need roughly $95–$105/hr. The intuitive "divide salary by 2,000" rule ($60/hr for $120K) dramatically understates the rate because it ignores the employer burden, SE tax, and benefits — all of which you now pay yourself.
When does it make financial sense to take a salaried job over freelancing?
When the total compensation package (salary + employer-matched 401k up to 6%, full healthcare, ESOP/RSUs, professional development budget) is equal to or greater than your freelance net equivalent. Use this calculator to find your equivalence point. In practice, freelancers need to earn 1.4–1.6× a comparable salary rate to break even on all the extra costs.