Powered by Remote Hub USA Net income after taxes. Covers 15.3% SE Tax + Income Tax. Software, internet, equipment. Insurance & retirement savings. Time spent on marketing, emails, etc. For business growth/buffer. / hour
As an independent contractor (1099), you act as your own business. You are responsible for the full 15.3% Self-Employment Tax, health insurance premiums, retirement funding, and business software. Additionally, you only get paid for billable hours, meaning administrative tasks and vacations are uncompensated. Your hourly rate must absorb these costs to equal a W-2 employee's standard of living.
A Remotehubusa.com Tool Freelance Hourly Rate Calculator
Income & Taxes
Overhead & Benefits
Time & Profit
Minimum Target Rate
Financial Breakdown
Why is this rate higher than a W-2 salary?
A lot of freelancers pick their rate by guessing, or by copying whatever a competitor is charging. The problem is that a rate that works for someone else might not cover your expenses, your taxes, or the hours you spend on things you never get paid for — client calls, invoicing, chasing new work.
This calculator does the actual math for you, so the number you land on is one that can genuinely support your business, not just one that sounds reasonable.
What Goes Into the Calculation
- The annual income you actually want to hit
- Your regular business expenses — software, equipment, internet, all of it
- Self-employment tax, since freelancers cover both the employer and employee side of Social Security and Medicare
- The hours you spend on unpaid work like admin and finding clients
- And finally, a recommended hourly rate based on everything above
Why This Matters More With US Clients
US companies hiring freelancers or contractors generally expect a confident, specific rate quote — not “whatever works for you.” Undercharging doesn’t just hurt your income; it can quietly signal to a client that you’re less experienced than you are. A rate that’s actually calculated, rather than guessed, tends to land better in negotiations.
How to Use It
Enter the annual income you’re aiming for, your estimated monthly expenses, and how many hours a week you realistically bill (not the hours you’re at your desk — the hours you actually invoice). The calculator handles the rest.
Who Tends to Use This
- Freelancers who are new to remote or contract work
- People transitioning out of full-time employment into freelancing
- Contractors negotiating rates with US-based clients
- Anyone who’s had that nagging feeling they’re underpricing themselves
Free, No Account Needed
Run the numbers as many times as you want.
One Thing to Keep in Mind
This gives you a solid starting point based on the numbers you put in. Actual market rates still shift depending on your industry, experience, location, and what a given client can pay. Treat it as a baseline for negotiation, not a fixed price tag.
Other Tools You Might Want
- ATS Resume Score Checker — check how well your resume matches a job posting
- ATS Resume Studio — build a resume that follows US hiring conventions
- USA Salary Calculator — see what a job offer actually pays after taxes
- Freelance Rate Calculator — work out a fair hourly rate for freelance work
