glunty Freelancer Rate Calculator (Salary to Hourly)
Convert annual salary target to freelance hourly rate. Estimate only, not financial advice.
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This tool produces an arithmetic estimate based on the values you enter. It is NOT financial, tax, or business advice. Real-world rates depend on your market, your specialty, your client mix, your local tax rules, and many other factors not modeled here. Consult a tax professional or accountant before setting your actual rate.
What this tool does
Takes a target annual salary (what you want to take home after expenses) and works backward to a freelance hourly rate that produces it. The math accounts for two realities of self-employment that catch newer freelancers: not every working hour is billable (admin, sales, learning, breaks all eat the day), and self-employed work carries overhead salaried employment hides (self-employment tax, equipment, software, insurance, retirement contributions). Computation is local; nothing is transmitted.
How to use it
Enter your target take-home salary. Set the number of working weeks (most full-time freelancers use 48 to account for vacation, sick days, and holidays). Set billable hours per week (rarely 40; 25 is a healthy starting estimate for full-time freelancing, more if you only do project work and less if you also do business development). Set an overhead percentage (25 to 35 is typical for US-based freelancers; varies by country). Press Calculate.
Common use cases
- Setting a starting rate when transitioning from salaried employment to freelance.
- Sanity-checking that a project quote covers your time at the rate you need.
- Comparing the implied hourly rate of a fixed-fee project against your floor.
- Working out how a rate increase changes your annual take-home, holding billable hours constant.
- Estimating the rate impact of taking longer vacations (fewer working weeks, higher rate to compensate).
Common pitfalls
- Underestimating non-billable time. A new freelancer might assume 40 billable hours a week. In practice, time spent on prospecting, contracts, invoicing, taxes, equipment maintenance, and learning is unbillable but unavoidable. 25 is a realistic baseline; some experienced freelancers settle around 30, very few sustain 35 plus.
- Overhead is more than you think. Self-employment tax (US), health insurance you used to get for free, retirement contributions, business insurance, software and SaaS subscriptions, equipment depreciation, accountant fees. The 25-35 percent default covers a typical US case; engineers in some countries face higher overhead, hobbyist-side-gig freelancers face lower.
- Market rates have a ceiling and a floor. Math says you need $300 an hour; market says clients in your niche pay $150. The fix is sometimes better targeting (different niche, different client size), sometimes a lower target salary, sometimes more hours per week, sometimes a different career path. This tool tells you the math; the market sets the rest.
Frequently asked questions
- What overhead percentage should I actually use?
- For US-based freelancers, 25-35% is typical. The components: self-employment tax (around 15.3% on top of income tax), health insurance (varies wildly: $400-1500 a month), business insurance (errors-and-omissions if you do consulting), retirement savings (15-20% of gross is the rule of thumb), software and SaaS subscriptions, equipment depreciation, accountant fees, training. UK and Canada often face higher overhead due to taxes; some EU countries lower due to social safety nets.
- Is 25 billable hours per week realistic?
- For a sustainable full-time freelance practice, yes. The other 15 hours of a 40-hour week go to prospecting and proposals, contracts and negotiation, invoicing and chasing payment, learning, and business admin (taxes, accounting, banking). Some experienced freelancers settle around 30 billable hours; very few sustain 35+ over years without burnout.
- Why is my market rate lower than this calculation says I need?
- One of three things is true. (1) Your target salary is unrealistic for your niche; consider whether the market values your work at the level you assumed when picking the salary. (2) You have non-billable time the market will not pay for; either accept lower take-home or specialize to command higher rates. (3) Your overhead estimate is too high; check the components. The math tells you what you need; the market tells you what is achievable.
- How do I move from this hourly rate to project-based pricing?
- Estimate the hours the project requires. Multiply by your hourly. Add a buffer (20-50%) for risk: scope creep, revisions, communication overhead, the unknown unknowns. Quote the buffered total as a fixed fee. The client pays a known number; you absorb timing risk in exchange for the right to deliver value-for-money rather than time-sheet hours.
- Does this account for taxes?
- Indirectly, through the overhead percentage. The 25-35% default assumes self-employment taxes are part of overhead. For more precision, separate tax from other overhead: a tax-only line item (federal + state + self-employment), and a separate operating-overhead line. Then the salary you enter becomes after-tax take-home; the math gets cleaner but takes longer to set up. Talk to a tax professional for your specific situation.
- What if I freelance part-time alongside salaried work?
- Reduce both inputs proportionally. If freelance is 20% of your time (8-10 hours billable per week, 48 weeks a year), use those numbers and a target salary that reflects only the freelance portion of your annual goals. Do not double-count health insurance overhead if your salaried job covers it; lower the overhead percentage accordingly.
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