Contractor Hourly Rate Calculator
Find the hourly rate that matches your salaried job with benefits as a contractor.
Free Contractor Hourly Rate Calculator — Replace Your Salary
Thinking of going freelance from your salaried job? Your contractor rate needs to be much higher than your W-2 hourly equivalent — to cover self-employment tax, health insurance, retirement, vacation, and dry weeks. This calculator finds your true break-even rate.
How to use this tool
- 1
Enter your salary and benefits to replace
Health, 401k match, PTO.
- 2
Set billable weeks and hours per week
Realistic — not 52 × 40.
- 3
See break-even and recommended rate
With 25% profit margin baked in.
Pro tips
- Charge at least 1.5–2× your W-2 hourly equivalent — that's not greedy, it's math.
- Plan for 6–10 weeks of dry time per year — sickness, vacation, between-client gaps.
- Most freelancers undercharge by 30–50%. Track every dollar — you'll see why you need to raise rates.
Frequently asked questions
What's a realistic billable %?
60–70% of work hours for established freelancers. Newer freelancers spend 50% on marketing/admin.
Should I charge daily or hourly?
Day rates protect against scope creep. Hourly is fairer for small projects. Fixed-bid is best for well-defined work.
What about a discount for retainer clients?
10–20% off list rate for guaranteed monthly hours is fair — it stabilizes your income.
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