Freelance Hourly Rate to Salary Converter
Your freelance rate and a salaried job aren't directly comparable. Employees get benefits worth 30-40% of their salary that freelancers pay for themselves. This calculator shows the true salary equivalent of your freelance rate — or what hourly rate you need to match a salary.
Your Freelance Rate
Percentage of working hours you actually bill to clients
Your $75/hr freelance rate is equivalent to a salary of
$73,871/yr
after accounting for self-employment tax, benefits, and unpaid time off
How We Calculated This
Quick Reference: Hourly Rate to Salary
| Hourly Rate | Naive Salary | True Salary Equiv. | Difference |
|---|---|---|---|
| $25/hr | $52,000 | $19,357 | -$32,643 |
| $50/hr | $104,000 | $46,614 | -$57,386 |
| $75/hr | $156,000 | $73,871 | -$82,129 |
| $100/hr | $208,000 | $101,127 | -$106,873 |
| $125/hr | $260,000 | $128,384 | -$131,616 |
| $150/hr | $312,000 | $155,641 | -$156,359 |
| $200/hr | $416,000 | $210,155 | -$205,845 |
Based on 70% billable time, $7,900 health insurance, 20 PTO days.
Why $75/hr Freelance Does NOT Equal $156,000 Salary
The naive calculation ($75 x 2,080 hours) gives $156,000 — but freelancers earning $75/hr typically take home what a $90,000-$110,000 salaried employee makes. Here's why:
- Self-employment tax (15.3%) — employees only pay half (7.65%); their employer covers the rest
- Health insurance — employers pay an average of $7,900/year toward individual coverage
- 401(k) match— a 4% match on $100K salary = $4,000 free money you don't get as a freelancer
- Paid time off — 15-20 days PTO is unpaid as a freelancer, costing thousands
- Non-billable hours — admin, marketing, and sales eat 20-40% of your time
When to Use This Calculator
Leaving a salaried job?Use the "Salary to Hourly Rate" mode to find what you need to charge to maintain your total compensation, not just your base pay.
Comparing a job offer to freelancing?Use the "Hourly to Salary" mode to see what your current rate is really worth in salary terms.
Negotiating rates?Show clients the breakdown — many don't realize the hidden costs of freelancing and why rates must be higher than employee hourly wages.
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Frequently Asked Questions
How do I convert my freelance rate to a salary?
Multiply your hourly rate by your actual billable hours per year (not 2,080), then subtract self-employment tax (15.3%), health insurance, and the value of benefits you'd receive as an employee like PTO and retirement matching.
What hourly rate equals $100K salary?
To match a $100K salary with full benefits, most freelancers need to charge $65-$85/hr depending on their billable utilization rate and location. The common answer of "$48/hr" ($100K / 2,080) dramatically underestimates the true cost.
Why is the salary equivalent so much lower than expected?
Freelancers absorb costs that employers normally pay: the employer half of FICA (7.65%), health insurance ($7,900+ average), retirement contributions, paid leave, and non-billable administrative time. These hidden costs reduce your effective earnings by 30-50%.
Should I include benefits when comparing freelance to salary?
Absolutely. Total compensation (salary + benefits) is the only fair comparison. A $90K salary with good benefits often beats a $120K equivalent in freelance gross income once you account for self-employment tax, insurance, and unpaid time off.
What is a typical billable utilization rate?
New freelancers average 50-60% billable utilization. Established freelancers with regular clients reach 70-80%. The remaining time goes to marketing, admin, invoicing, professional development, and sales. Never assume 100% billable time.