Freelance rates
Estimate a rate that covers non-billable time, admin work, software, insurance, and unpaid gaps.
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Contractor rate calculator
Contractor Rate Calculator for Hourly Freelance and Consulting Rates
Estimate a contractor hourly rate from target salary, benefits replacement, business expenses, tax reserve, billable hours, and profit buffer.
$142.38
Hourly rate
$1,139.05
Day rate
$199,333.33
Annual revenue target
Contractor rate result
Hourly rate
$142.38
Revenue target divided by annual billable hours.
Day rate
$1,139.05
Hourly rate multiplied by an 8-hour billing day.
Monthly revenue target
$16,611.11
Annual revenue target divided by 12 months.
Annual revenue target
$199,333.33
Salary, benefits, expenses, tax reserve, and profit buffer combined.
Contractor rate estimate summary Target employee-equivalent salary: $100,000.00 Benefits replacement cost: $18,000.00 Business expenses: $12,000.00 Tax reserve: 25.0% Annual billable hours: 1400 Profit or buffer: 15.0% Suggested hourly rate: $142.38 Suggested day rate: $1,139.05 Annual revenue target: $199,333.33 Monthly revenue target: $16,611.11 Note: This estimate is not tax, legal, accounting, or pricing advice. Real pricing also depends on market demand, contract risk, payment terms, client value, and urgency.
What this contractor rate calculator helps price
Consulting retainers
Use the monthly revenue target to sanity-check retainers, part-time contracts, and scope changes.
Employee vs contractor offers
Compare a full-time salary against contract work after replacing benefits and reserving for taxes.
How to choose a contractor rate
Billable hours matter
A freelancer rarely bills 2,080 hours per year. Sales, admin, learning, vacation, and gaps reduce available billable time.
Do not forget benefits
Health insurance, retirement contributions, paid time off, equipment, and professional tools may need to be covered by your rate.
Price value and risk
The formula gives a floor. Market demand, niche expertise, urgency, liability, and payment terms can justify a higher rate.
Educational estimate only
This contractor rate calculator is for educational planning only. It is not tax, legal, accounting, employment, or financial advice.
Contractor rate calculator FAQ
Why is contractor hourly rate higher than employee hourly pay?
Contractors usually cover their own taxes, benefits, unpaid time, insurance, tools, admin work, and client acquisition.
What are billable hours?
Billable hours are hours you can charge to clients. They exclude admin, sales, marketing, training, vacation, and unpaid gaps.
Should I add a tax reserve?
Many independent workers reserve a percentage for taxes, but the right amount depends on location, entity structure, deductions, and income.
Is this the final rate I should quote?
Use it as a floor or planning estimate. Final pricing should also reflect market rates, client value, scope, risk, and negotiation position.