How Much to Charge as a Freelancer in 2026: a Simple Method
If you are staring at a blank "my rate" field, here is the shortest honest route to a number: start from a salary you would accept as an employee, add what an employer would have paid on top of it, add your business costs, and divide by the hours you can really bill. This is the quick version. For a rate built up from your own tax rate and expenses, use the hourly rate calculator and the longer hourly rate formula guide.
The idea in one line
Rate = (salary you would accept ÷ 0.70 + business costs) ÷ billable hours
The 0.70 comes from the US Bureau of Labor Statistics. In its Employer Costs for Employee Compensation release for June 2026 (published September 9, 2026), private-industry employers paid $46.89 per hour worked in total compensation. Wages and salaries were $32.82 of that and benefits were $14.07, or 30.0 percent. Benefits in that survey include paid leave, insurance, retirement contributions and legally required items such as Social Security and Medicare. In other words, a job paying you $70,000 in wages costs the employer about $100,000. As a freelancer, that other 30 percent is now yours to cover. Source: BLS Employer Costs for Employee Compensation.
Step 1: Pick the salary you would accept
Use a gross salary, the number on an offer letter, not take-home pay. Because it is before income tax, you do not need to guess a tax rate with this method. Example: $70,000.
Step 2: Divide by 0.70
$70,000 ÷ 0.70 = $100,000. This stands in for the employer half of payroll taxes, paid time off, health insurance and retirement that you now fund yourself. It is a national average across all private employers, so your real mix will differ. If you already know your health insurance premium, replace the guess with the real figure.
Step 3: Add business costs
Add software, equipment, insurance, a coworking desk, accounting fees and anything else you pay to run the business. Example: $6,000. Running total: $106,000. The freelancer expenses guide lists the usual ones.
Step 4: Divide by billable hours
Start from 2,080 hours (52 weeks × 40). Do not also subtract holidays and vacation here, because the 30 percent already pays for paid leave. Do subtract the time you cannot bill: finding clients, quotes, invoicing, admin, learning. Many freelancers bill roughly 50 to 70 percent of their working time; treat that as a starting range and replace it with your own log as soon as you have one.
At 60 percent billable: 2,080 × 0.60 = 1,248 hours. Rate: $106,000 ÷ 1,248 = about $85 per hour.
For comparison, the salary shortcut ($70,000 ÷ 2,080) gives about $34 an hour. The gap is what the 30 percent, your business costs and your unbillable time add up to.
The same method at other salaries and billable shares
Business costs held at $6,000 in every row. Hourly rate, rounded to the nearest cent.
| Salary you would accept | 50% billable | 60% billable | 70% billable |
|---|---|---|---|
| $50,000 | $74.45 | $62.04 | $53.18 |
| $70,000 | $101.92 | $84.94 | $72.80 |
| $100,000 | $143.13 | $119.28 | $102.24 |
The billable share moves the answer more than almost anything else. Going from 70 to 50 percent billable adds roughly 40 percent to the rate you need.
What this method leaves out
- It is not a market price. It tells you the minimum that makes freelancing match a job. What clients will pay depends on your field, experience and the value of the work. See how to charge more as you go.
- It simplifies tax. Freelancers pay self-employment tax of 15.3 percent on 92.35 percent of net profit, up to a Social Security wage base ($184,500 in 2026), plus income tax. The 0.70 divisor approximates the employer-side costs but not your exact tax bill; check the self-employment tax guide and the tax set-aside calculator. Verify current figures at IRS.gov.
- It does not include unemployment insurance. Freelancers generally cannot claim it, so some people add a cushion for slow months.
- It is a floor for hourly work. Fixed-price projects can earn more per hour if you work quickly. Check each project's effective rate afterwards.
Turn the rate into a quote
Once you have a minimum rate, price a project by multiplying it by your honest hours estimate, then add a buffer for revisions. Our free quote template does the arithmetic: hours and rate in, total, deposit and effective rate out. Keep your own numbers; we cannot know your costs.
General information, not financial, tax or legal advice. Averages come from a national survey and will not match your situation exactly.