Freelance rate FAQ (United States)
The essentials for understanding your rate, your taxes, and how to use the calculator.
Start from your net income goal, add your business expenses and taxes, then divide by your realistically billable hours per month, not your total working hours. The US average sits around $47.71 per hour, but it varies widely by specialty and experience. Use the range as a sanity check, not a target to copy.
Self-employment tax is 15.3% of your net earnings: 12.4% for Social Security (capped at $184,500 in 2026) plus 2.9% for Medicare with no cap. High earners pay an extra 0.9% Medicare tax above $200,000. This is separate from, and in addition to, federal income tax.
The Qualified Business Income deduction lets most sole proprietors deduct 20% of their net business income before calculating federal income tax, as long as total taxable income stays under the phase-out threshold ($201,775 for single filers in 2026). It only reduces federal income tax, not self-employment tax — this calculator applies it automatically.
A common rule of thumb is 25-30% of every payment you receive, though your actual rate depends on your income level, deductions, and state taxes. If you expect to owe $1,000 or more for the year, the IRS generally requires quarterly estimated payments to avoid an underpayment penalty.
In most US states, professional services are not subject to sales tax, though a handful of states do tax certain services. Check your specific state's rules directly, since this varies and isn't something a national calculator can determine for you.