What to charge as a freelancer: the rate that matches a $60,000 salary is $52 an hour
Divide a salary by 2,080 hours and the rate looks fine. Then subtract the employer's payroll tax, the benefits, the unbillable time — and the number nearly doubles.
The instinctive calculation is salary divided by hours. $60,000 divided by 2,080 working hours is $28.85. Most first-year freelancers charge something close to that, and most of them discover by the following spring that they have taken a pay cut.
Three things are missing from the division, and each one is measurable.
1. The employer's half of payroll tax
An employer pays 7.65% of salary in Social Security and Medicare tax on top of what the employee sees deducted. A freelancer pays both halves — the 15.3% self-employment tax. On $60,000 that is $4,590 the employer was paying invisibly.
2. Benefits
Health insurance is the large one. The employer share of a single-coverage plan runs into thousands of dollars a year; the exact figure depends on the plan, and the number to use is whatever the freelancer will actually pay for their own cover. This guide uses $8,000 as a round illustrative figure. Retirement matching, paid holidays and disability cover are also benefits with a price.
3. Hours nobody pays for
The 2,080 hours in a working year include holidays and vacation, which the salary paid for and a client will not. Take out 15 days of vacation and 10 public holidays: 1,880 hours remain. Then take out the time spent finding clients, invoicing, doing the books and chasing payment. A quarter of the remaining hours is a common share, and it leaves 1,410 billable hours.
Salary $60,000 + employer payroll tax $4,590 + benefits $8,000 = $72,590 to replace. Over 1,410 billable hours that is $51.48 an hour — 78% above the naive $28.85. Illustrative: the benefits figure and the unbillable share are assumptions, and both are stated so they can be changed.
| Step | Figure |
|---|---|
| Salary | $60,000 |
| + employer payroll tax (7.65%) | $4,590 |
| + benefits (assumed) | $8,000 |
| = to replace | $72,590 |
| Hours in a year | 2,080 |
| − vacation and holidays (25 days) | 1,880 |
| − 25% unbillable | 1,410 |
| Rate | $51.48 / hour |
What this does not include
- Income tax — deliberately. The salary was also taxed, so the comparison is gross to gross.
- Gaps between clients. The 25% unbillable share assumes steady work. A freelancer with two idle months a year has 1,175 billable hours, and the rate becomes $61.78.
- Equipment, software, insurance, a workspace. Each is a cost the employer carried.
None of this says what the work is worth to a client. It says what the freelancer needs to receive to stand still. Pricing above that is a business decision; pricing below it is a subsidy the freelancer is paying the client, whether or not either of them has noticed.
Sources
- Self-employment tax (Social Security and Medicare taxes)Internal Revenue Service · checked Sep 24, 2026
- 2026 Cost-of-Living Adjustment fact sheet — tax rates and maximum taxable earningsSocial Security Administration · checked Sep 24, 2026