You're not charging too much. You're probably charging too little.

Add the take-home income you want to your annual business expenses, then add the tax you will owe on that amount, which gives the pre-tax revenue your business needs. Divide that figure by your realistic billable hours for the year, meaning billable hours per week multiplied by the weeks you actually work after holiday, sick days and unpaid admin.

The formula is (take-home + expenses + tax) ÷ billable hours. The part people get wrong is almost never the arithmetic. It is using total working hours instead of billable hours, and forgetting that self-employment tax is charged before income tax.

Billable hours are the hours a client pays for. Total working hours also include everything you do that nobody pays for directly: invoicing, email, proposals, marketing, bookkeeping, learning, and chasing payments.

Most freelancers can bill somewhere between 50 and 70 percent of the hours they actually work. Dividing your income target by 2,000 hours a year assumes a 100 percent billable rate that essentially nobody achieves, and it is the single most common reason a carefully calculated rate still leaves you short.

After profession itself, experience is the largest factor in what freelancers charge. An entry-level freelancer with nought to two years behind them typically charges a little over half what an early-career freelancer charges. Someone with ten or more years, or a genuine specialism, commonly charges two to three times the early-career figure.

The reason is risk rather than speed. An experienced freelancer is less likely to misjudge the brief, need supervision, or produce something that has to be redone, and clients pay a premium for that certainty.

Yes, though less than it did. Freelancers based in North America, Switzerland and Australia still command the highest rates, with Western Europe close behind, while comparable work in South and Southeast Asia, Latin America and parts of Eastern Europe is priced considerably lower.

The gap mostly reflects which clients you have access to rather than the quality of the work. Freelancers who deliberately sell into higher-paying markets can and do close much of it.

In the United States, self-employment tax alone is 15.3 percent of 92.35 percent of net profit, covering Social Security and Medicare, and that is before any federal or state income tax. A common rule of thumb is to set aside 25 to 30 percent of every payment, and higher earners in high-tax states should plan for more.

The quarterly tax calculator works this out from real 2026 IRS brackets rather than a rule of thumb.

It is free and there is no sign-up. Every calculation runs in your own browser, and the figures you type are never sent to us or stored anywhere. The only network request the tool makes is an optional lookup to guess your country so the form starts on the right settings, and you can change that selection at any time.