Salary to Freelance Rate Calculator
Leaving a salaried job? See the freelance hourly rate you need to charge just to break even on the benefits and taxes you now cover yourself.
Your details
Rough figures are fine — you can refine later.
How we calculate this
We gross a salary up to a freelance-equivalent, then spread it over billable hours.
1. Equivalent revenue. Salary × (1 + benefits load + 7.65% employer payroll tax). The 7.65% (6.2% Social Security + 1.45% Medicare) is the employer half you must now cover yourself; it’s derived from the same rates in our tax-constants.json, not hard-coded.
2. Billable hours. Billable hours per week × working weeks per year.
3. Rate. Equivalent revenue ÷ billable hours.
This is a break-even estimate, not tax advice. It doesn’t add a profit margin — for that, set a target take-home in the Freelance Hourly Rate calculator.
Primary sources
- Employer-side FICA rate (6.2% Social Security + 1.45% Medicare) — IRS Publication 15
- Total-compensation / benefits-load norms (BLS Employer Costs for Employee Compensation)
The math that keeps people from underselling their independence
When you're leaving a salaried job — or weighing whether to — the tempting shortcut is to divide your salary by 2,080 hours and call that your freelance rate. It's a trap. That number ignores everything your employer paid on top of your salary, and everything you're about to start paying yourself. This calculator converts a salary into the freelance rate that leaves you genuinely no worse off.
What your salary was really costing your employer
Your paycheck was never the whole story. On top of your base salary, your employer paid:
- Half of your payroll tax — 7.65% of your wages toward Social Security and Medicare, matched invisibly. As a freelancer, you pay both halves through self-employment tax.
- Benefits — health insurance, any retirement match, life or disability coverage. These often add 20–30% on top of salary all by themselves.
- Paid time off — vacation, holidays, and sick days you were paid for without billing anything.
Add it up and the true cost of employing you was well above your salary. To replace that job's total value, your freelance income has to reach the same total — not just the base number on your offer letter.
How the calculator grosses it up
Enter your salary, an estimate of what your benefits are worth (25–40% is typical, so 30% is the default), and your realistic billable hours. The tool multiplies your salary by (1 + benefits load + 7.65% employer payroll tax) to get the revenue you'd need to bill, then divides by your billable hours for the equivalent rate.
It also shows the naïve "salary ÷ hours" figure so you can see the gap directly. That gap is exactly the amount freelancers leave on the table when they price off their old wage.
Break-even, not target
This is your break-even rate — the point where freelancing pays as well as the job, once hidden costs are counted. It is deliberately not a profit target. Freelancing carries risk an employee doesn't: no guaranteed income, no unemployment cushion, the burden of finding your own work. Most freelancers should charge meaningfully above break-even to compensate for that risk and to build a cushion for slow periods. To price in a profit goal instead, use the Freelance Hourly Rate calculator.
What this is
A break-even estimate, not tax or financial advice. Benefits values vary widely by person and role, and the billable-hours assumption matters enormously — bill fewer hours than you enter and your real required rate is higher. Use this to avoid the single most common freelance pricing mistake: charging your old wage and quietly taking a pay cut.
Common questions
How do I convert my salary to a freelance hourly rate? + −
Don’t just divide salary by 2,080 hours — that ignores everything your employer paid on top. Add the value of your benefits (typically 25–40%) and the employer’s 7.65% share of Social Security and Medicare, then divide by your realistic billable hours. This tool does exactly that.
Why add 7.65% for payroll tax? + −
As an employee, your employer pays half of your Social Security and Medicare taxes — 7.65% of your wages — invisibly. As a freelancer you pay both halves (self-employment tax). To be no worse off, your rate has to cover that extra 7.65% your employer used to absorb.
What is the "benefits load"? + −
The dollar value of benefits you’ll now buy yourself: health insurance, any retirement match, paid time off, sick days, and sometimes life or disability coverage. For many roles this is worth 25–40% of base salary, which is why the default here is 30%.
Is this the same as my minimum viable rate? + −
It’s your break-even rate — the point where freelancing pays as well as the job you left, once you account for hidden costs. Most freelancers should charge above this to build a profit cushion and absorb slow periods. Use the Freelance Hourly Rate tool to price in a target profit.
Keep going
Prepared for tax year 2026. Every rate and cap on this page cites a primary IRS or SSA source. Estimates only — not tax or financial advice. — for planning purposes only, not tax, legal, or financial advice.