How these numbers are calculated

The rate formula

The calculator solves for the revenue required to leave you with a target take-home income after tax and expenses, then divides by billable hours:

true hourly rate = (take-home target + business expenses + tax owed) ÷ annual billable hours

The complication is that tax owed depends on profit, profit depends on revenue, and revenue is what we are solving for. Rather than applying a flat estimated rate, the calculator runs a binary search over 60 iterations: it proposes a revenue figure, computes the exact tax on the resulting profit, checks the take-home against your target, and narrows until it converges. This is why the result responds properly to bracket thresholds instead of moving in a straight line.

United States tax

Three components, calculated in the order the tax code applies them.

• Self-employment tax: 15.3 percent applied to 92.35 percent of net profit, covering both the employee and employer halves of Social Security and Medicare.
• Federal income tax: computed through the real 2026 progressive brackets for your filing status, on profit less half of self-employment tax and less the standard deduction. Bracket figures come from IRS Revenue Procedure 2025-32.
• State income tax: applied as a flat rate using each state's top marginal rate, sourced from published Tax Foundation figures for 2026.

Tax outside the United States

Twenty-eight countries use a simplified three-tier effective rate model rather than full bracket data. Net profit is taxed at a low rate on the first $40,000, a middle rate from $40,000 to $100,000, and a high rate above that, with each country's three rates informed by published effective-rate comparisons for self-employed individuals.

This responds to income level, which a single blended rate would not, but it is an approximation and the tool labels it as one. Countries not on the list let you enter your own estimated rate instead.

Where the rate benchmarks come from

This is the part that deserves the most scepticism, so here is exactly what we do.

Each profession has one anchor number: an estimated mid-point hourly rate for an early-career freelancer, meaning two to five years of experience, based in the United States. That anchor is set by triangulating three things:

1. Published ranges from freelance marketplaces and industry rate guides, which skew low because marketplace work is competitive, and which we treat as a floor rather than a centre.
2. Salaried equivalents for the same role, converted to a freelance figure by adding self-employment tax, the benefits an employer would fund, and a realistic utilisation adjustment for unbillable hours.
3. Rates practitioners report publicly in professional communities and published rate surveys, which skew high because people who publish their rates are not a random sample.

Where those three converge, confidence is reasonable. Where they diverge widely, which happens most in fields with very broad scope such as graphic design and consulting, the anchor sits nearer the middle and the true spread is wider than any single number can express.

The multipliers

The anchor is adjusted by three multipliers. All are visible in the tool and printed on every profession page, so nothing is happening behind the curtain.

Experience

Specialisation

Each profession has a small set of specialisms with multipliers between 1.1 and 1.5, reflecting scarcity of the skill and how close the work sits to the client's revenue. These are the most judgement-heavy numbers on the site and the most likely to move over time, particularly in fields where AI is changing which skills are scarce.

Region

Country multipliers are relative to the United States at 1.0, and reflect differences in client market and cost of living rather than any assessment of skill. A freelancer who sells into a higher-paying market can and should charge above their local multiplier.

The billable hours assumption

The calculator defaults to 22 billable hours a week across 46 weeks, which is roughly 1,000 billable hours a year. This is deliberately lower than a conventional working year, because freelance weeks contain substantial unpaid time. The guide to billable hours covers how to measure your own figure, and why this input has more leverage on your rate than any other.

Corrections

If a figure here looks wrong, or a tax rule has changed and we have not caught it, the contact page reaches us directly. Corrections are made and the updated date on the affected pages changes with them.