Tax year 2026 · United States federal
Freelance Rate Floor Calculator
Work backwards from what you want to keep. Two things move the answer more than people expect, and neither is the tax rate.
Your floor, per hour
$119
Below this, the work costs you money once tax and expenses are paid.
- Revenue you need to bill
- $115,402
- Tax at that revenue
- $23,402
- Business expenses
- $12,000
- Left for you
- $80,000
1,380 hours at the desk · 966 actually billable
The gap is 414 hours a year you work and cannot invoice.
The usual shortcut gives $95. That divides your target by every hour at the desk and adds a flat 30% for tax. It is $24 an hour short of covering you.
Why "add 30% for tax" gives the wrong rate
Tax is not a percentage you add at the end. It depends on the revenue, and the revenue is what you are solving for — the calculation is circular. This one resolves it properly, searching for the revenue whose after-tax remainder equals your target, so the answer is the rate that actually produces the take-home you asked for.
The shortcut is wrong in both directions. At lower incomes it overshoots, because the standard deduction and the QBI deduction absorb most of the profit. At higher ones it undershoots, because the 24% and 32% brackets have started to bite.
The mistake that costs more than the tax one
Almost everyone divides their target by the hours they intend to work. But sales calls, invoicing, scope arguments, admin and the proposal that did not convert are all hours at the desk that nobody pays for.
Utilisation is the share that actually bills, and for most solo operators it lands between 60% and 75%. Drag the slider from 100% down to 70% and watch the floor move — that difference is larger than anything tax does to the number.
This is a floor, not a price
It tells you where the work starts losing money. It says nothing about what the work is worth, which depends on the outcome you produce, what the client saves or earns, and what else they could buy instead.
Treat it as the line you do not go below, then price above it for reasons that have nothing to do with arithmetic.
What is not included
- State income tax, except for the nine states that levy none
- Health insurance, which for a US freelancer is often the largest single expense — put it in the expenses field
- Retirement contributions, if you want them funded from the business rather than from take-home
- Unpaid invoices and bad debt, which are real and which no calculator can predict
Figures on this page are checked against the primary source cited for each one, and the calculations behind them are covered by automated tests. No credentialed tax professional has reviewed this page. Treat it as a well-sourced starting point, not as a substitute for advice on your own situation.