The short answer: to match a $60,000 salary you need to charge about $68 an hour as a freelancer, not the $28.85 you get from dividing $60,000 by 2,080 work hours. Here is the math, so you can swap in your own numbers.
This is educational content, not financial advice. Figures are assumptions for illustration.
Why $28.85 an hour is a trap
A salary of $60,000 over 2,080 hours (40 hours x 52 weeks) is $28.85. A new freelancer sees that number, adds a little, and quotes $35. Then the bills show up. An employee gets paid vacation, gets half of the payroll tax paid by the employer, and usually has health insurance help. A freelancer pays for all of it, and only gets paid for the hours a client can be billed.
Step 1: Count the hours you can actually bill
Take 52 weeks and subtract 6 for vacation, holidays and sick days. That leaves 46 weeks, or 1,840 working hours. Now be honest about the rest: finding clients, sending proposals, invoicing and answering email are unpaid. Many freelancers bill only 50% to 70% of their working time. At 60%, you have 1,104 billable hours.
Step 2: Add what an employer used to cover
| Item | Annual amount (assumption) |
|---|---|
| Target take-home equal to a salary | $60,000 |
| Employer half of Social Security and Medicare (7.65%) | $4,590 |
| Health insurance ($600 a month) | $7,200 |
| Software, retirement saving, accounting, equipment | $3,000 |
| Revenue you need | $74,790 |
The 7.65% line comes from the self-employment tax. The IRS explains that self-employed people pay both the employee and employer shares of Social Security and Medicare (15.3% in total, applied to 92.35% of net earnings). See the IRS page on self-employment tax. Income tax comes on top, the same as it would for an employee, so we treat the $60,000 as the pre-income-tax equivalent of a salary.
Step 3: Divide
$74,790 divided by 1,104 billable hours is $67.75 an hour. Round to $68.
| Share of time you bill | Billable hours | Rate you need |
|---|---|---|
| 50% | 920 | $81.29 |
| 60% | 1,104 | $67.75 |
| 70% | 1,288 | $58.07 |
The lesson: your rate matters less than how much of your week is billable. Moving from 50% to 70% saves you $23 an hour of rate pressure, without a single price increase.
Three ways to use this number
- Quote by project, not by hour. If you are fast (and AI tools make many people faster), an hourly rate punishes you. Estimate your hours, multiply by your target rate, then quote the total.
- Use AI for the unbillable work. Drafting proposals, summarizing meeting notes and writing invoices are the hours that drag your billable share down. See our guide to landing your first freelance client with AI.
- Check the platform cut. A marketplace fee changes the rate you must quote. We compared them in Upwork vs Fiverr fees.
Who this is for, and who should skip it
For: anyone replacing a paycheck or planning to go full time. Skip it if freelancing is a few extra hours a month: you have no health plan or vacation to fund, so the simple version of the math is fine. Remember the tax side too: the $400 rule can surprise new side hustlers.
Our take
The biggest freelance mistake is pricing against a salary instead of against your real costs. Do the three steps once, write the number down, and refuse work that falls far below it. Raise it when you are booked more than 80% of the time.
This is educational content, not financial advice.