Tax year 2026 · United States federal
What to charge as a freelancer
Work out the rate below which the work loses money, then price above it for reasons that are not arithmetic.
Those are two different questions and almost every article about freelance pricing answers only the second one, badly, by surveying what other people charge. What others charge tells you about their costs, their market and their nerve. It tells you nothing about whether a number covers yours.
The floor is computable
Three things decide it: what you want to keep, what it costs you to operate, and how many hours you can actually bill. The third one is where people go wrong before tax enters the picture at all.
Each quarterly payment
$3,486
- Q1$3,486.35
- Q2$3,486.35
- Q3$3,486.35
- Q4$3,486.36
- Net profit
- $75,000
- Self-employment tax
- $10,597
- Federal income tax
- $4,898
- QBI deduction
- −$10,720
- Total for the year
- $15,495
- Effective rate on profit
- 20.7%
- What you keep
- $59,505
About $1,291 a month set aside, if that is easier to hold to than four lump sums.
State tax not included. State income tax for is not included in this figure. The federal number above is complete; your total liability will be higher by whatever charges. See which states are covered at /state-taxes/, or check your state's revenue department for its current rate. What this site covers, state by state.
Tax is not a percentage you add at the end
The instinct is to work out a rate and then add something for tax. It does not work, because tax depends on the revenue and the revenue is what you are solving for. The calculation is circular.
Solved properly — searching for the revenue whose after-tax remainder equals your target — the answer differs from the shortcut in both directions. At lower incomes the standard deduction of $16,100 and the qualified business income deduction absorb most of the profit, irs.gov so adding a flat 30% overshoots. At higher ones the 24% and 32% brackets bite and it undershoots.
Self-employment tax at 15.3% applies to 92.35% of net profit, irs.gov which is nearly flat until earnings reach the Social Security wage base. The part that moves with income is the income tax, and it moves a lot.
The bigger error is about your own week
Ask someone how many hours they work and they say forty. Ask how many they invoiced last month and the answer is usually closer to twenty-five.
The difference is not laziness. It is sales calls, proposals that did not convert, invoicing, chasing payment, scoping arguments, tool maintenance, the tax return, and the hour lost to a client who rescheduled. None of it bills, and all of it is required.
Utilisation is the share that does bill, and for most solo operators it sits between 60% and 75%not measured. Assuming every hour bills understates your floor badly — a far larger error than anything the tax treatment does, as the worked example below shows.
A floor is not a price
This is where the arithmetic stops and judgement starts, and it is worth being explicit because a calculator can create a false sense of precision.
The floor says where you start losing money. What the work is worth depends on the outcome you produce, what it saves or earns the client, what else they could buy instead, and how badly they need it now. None of that is in a spreadsheet.
Charging your floor means running a business that never gets ahead: no buffer for a slow quarter, no investment, no raise. The floor is the line you refuse to go below, not the number you quote.
Everything in this cluster
- Utilisation and billable hours — the number that moves your floor more than tax does
- Hourly vs project vs retainer — the three models move risk, not just price
- Contractor rate vs salary equivalent — why the usual uplift is right about the total and wrong about the reason
- Raising rates with existing clients — the arithmetic of who you can afford to lose
Where the honest limits are
Rates in this niche are genuinely hard to research, because the published surveys are old, small, or run by companies selling something to freelancers. That is why this site is collecting its own — anonymously, banded, and published only once a segment has enough responses to mean anything.
Until then, treat any rate benchmark you read — including one here — as weaker evidence than your own cost structure.