Freelance Pay Calculator: What Should You Actually Earn as a Freelancer?
Freelance equivalent rate = Employee salary ÷ 0.55 (to account for taxes, benefits, overhead, and non-billable time)
A $90,000 salary employee needs to earn ~$164,000 gross as a freelancer to truly break even
The “freelance premium” — the extra income needed to cover what employment provides for free — is typically 40–60% above your target take-home
Calculate your exact number: Freelancer Pay Calculator
One of the biggest mistakes new freelancers make is pricing their services at roughly the same rate as their former salaried income. A $90,000/year developer shouldn’t charge $43/hr as a freelancer — that’s poverty pricing once you account for everything employment used to provide for free.
The Freelance vs. Employee Cost Comparison
When you’re employed, your employer covers costs you never see. As a freelancer, all of these come out of your revenue:
| Cost | As Employee | As Freelancer |
|---|---|---|
| Health insurance | Employer pays majority | You pay 100% (~$5,000–8,000/yr) |
| Retirement | Employer match + plan | You fund 100% yourself |
| Payroll taxes (SE tax, US) | Employer pays half (7.65%) | You pay full 15.3% |
| Equipment | Employer provides | ~$2,000–5,000/yr amortized |
| Paid vacation | Fully paid | Zero income during vacation |
| Sick leave | Usually paid | Direct revenue loss |
| Non-billable admin time | Paid as part of salary | Unpaid — 20–30% of working time |
The Salary-to-Freelance Rate Conversion Formula
The standard multiplier used by financial planners and freelance coaches:
Freelance Gross Revenue Target = Employee Salary ÷ 0.55
The 0.55 divisor accounts for:
- ~15% self-employment taxes
- ~10% business expenses and overhead
- ~15% benefits (health insurance, retirement)
- ~5% non-billable time cost
Salary Conversion Examples
| Employee Salary | Minimum Freelance Revenue | At 1,200 Billable Hrs = Hourly Rate |
|---|---|---|
| $60,000 | $109,091 | $91/hr |
| $80,000 | $145,455 | $121/hr |
| $100,000 | $181,818 | $152/hr |
| $120,000 | $218,182 | $182/hr |
Run your exact numbers — including your specific expense profile and tax situation — using the Hourly Rate Calculator.
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