Thinking of leaving a job to freelance? Enter your current salary, the value of your benefits and your expected costs, and this free calculator shows the freelance income and hourly rate you need to be as well off.
| Hourly rate you need | – |
| Employee hourly rate (2,080 hours) | – |
| Freelance rate compared with employee rate | – |
How it works
An employer pays for more than your salary: benefits such as pension, health cover and paid leave have a real value. As a freelancer you pay for these yourself, plus your business costs, and you can only bill part of your working hours. Income needed = salary × (1 + benefits %) + business costs. Hourly rate = income needed ÷ (billable hours per week × working weeks).
The result is a revenue target before tax. Tax rules for employees and self-employed people differ by country, so this compares pay before tax on both sides. Use the freelance hourly rate calculator to work back from take-home pay after tax.
Example
A 50,000 salary with benefits worth 20% and 4,000 of costs means you need 64,000 of freelance income. At 25 billable hours for 46 weeks (1,150 hours), the rate is about 55.65 an hour, compared with about 24 an hour for the employee.
Frequently asked questions
Why is the freelance rate so much higher?
Because you pay for benefits and costs yourself and can bill only part of your working week.
What benefits should I count?
Pension contributions, health insurance, paid holiday and sick pay, training and equipment.
Is this before or after tax?
Before tax on both sides. Tax differs by country and situation.
More free tools: Hourly rate calculator · Billable hours calculator · All free tools
This calculator is for general information and is not financial or tax advice.