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Salary to Freelance Rate Calculator

What your old salary is really worth as an hourly rate, once the things your employer quietly paid for are back on your side of the ledger.

✓ Updates as you type✓ Works on mobile✓ Your numbers stay on your device

The job you are comparing to

Overhead covers employer tax, benefits, pension, equipment, and paid leave.

Annual salary/yrEmployer overhead%

Weeks off/yrBillable hours/wk

The maths

How this is worked out

An employee costs an employer considerably more than the salary line: payroll tax, pension contributions, insurance, equipment, software, and every paid day the employee is not working. The calculator rebuilds that true cost, then spreads it over the hours you could actually invoice as a freelancer.

Equivalent rate = salary × (1 + employer overhead) ÷ [ (52 − weeks off) × billable hours per week ]

Worked example

A worked example

A $90,000 salary with 30% employer overhead really costs $117,000. Take six weeks off and bill 25 hours in each of the remaining 46 weeks — 1,150 hours — and the equivalent freelance rate is about $101.74 an hour.

Replace the figures above with your own — the result updates as you type.

Read this before you quote

What the number does and does not cover

Employer overhead of 25–35% is the usual planning range in the US and UK once payroll taxes, pension, insurance, and equipment are counted. It runs higher where statutory benefits are more generous.
Note the billable hours field says 25, not 40. A freelancer billing 25 hours a week is working a full week — the rest is the sales and admin an employer had other people doing.
This produces a like-for-like comparison, not a target. Freelancing carries risk an employee does not: no notice period, no sick pay, and gaps between contracts. Pricing at exactly parity prices that risk at zero.
The result is a useful sanity check against your rate floor. If the floor is far above salary parity, your costs or your billable hours need attention.

Questions

Salary to Freelance Rate Calculator: questions freelancers ask

Is it fair to charge more than my old salary works out to?

Yes, and the comparison above shows why: parity only reproduces your old income. It prices none of the risk, the unpaid gaps between contracts, or the fact that you now carry your own pension and sick pay.

What overhead percentage should I use?

25–35% covers most employed roles. If the job came with a strong pension, private healthcare, or expensive equipment and software, use the top of that range or above it.

My client says my rate is more than they pay a staff member.

It usually is, per hour, and that is the correct comparison to reject. They pay a staff member for 52 weeks including holiday, sickness, training, and idle time. They pay you only for hours that produce work.

Does this work in reverse — freelance rate to salary?

Roughly. Multiply your rate by realistic billable hours to get revenue, then subtract business costs and divide by 1 plus the overhead figure. The rate conversion chart is a faster way to see the annual figure.

Next step

Keep working the numbers

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