How do I calculate my freelance hourly rate?+
Start with your desired annual income. Add 25-30% for self-employment taxes, 15-20% for business expenses and tools. Divide by billable hours per year (typically 1,000-1,500 for freelancers). Add platform fees (5-20%) on top.
What is 'True Hourly Value' for freelancers?+
True Hourly Value (THV) is what you actually earn per hour after subtracting: platform fees, self-employment taxes, unpaid admin time, software costs, and other overhead. It's always lower than your advertised hourly rate.
What is Upwork's fee structure?+
Upwork charges freelancers: 20% on first $500 with a client, 10% on $500-$10,000, and 5% above $10,000. So if you charge $100/hour, you keep $80 on a new client. Fees decrease as you earn more with the same client.
How much tax do freelancers pay?+
Self-employed freelancers in the US pay: Self-employment tax (15.3% on net earnings), plus federal income tax based on bracket. As a rough estimate, set aside 25-30% of gross income for taxes. Exact amounts vary by income level and deductions.
How do I know if I should freelance or take a full-time job?+
A $100/hour freelance rate after taxes and expenses often earns similar to a $65,000 salaried job when you factor in benefits, paid leave, employer tax contributions, and the stability premium. This calculator helps you compare fairly.
How do I set my freelance rate as a beginner?+
Start by calculating your target annual income (e.g., $60,000), add 30% for taxes and expenses ($78,000), then divide by your available billable hours per year (around 1,000 for beginners). That gives approximately $78/hour. Factor in platform fees on top. Never price below your true cost.
What is 'true hourly value'?+
It's your real take-home income divided by every hour you work — billable and unbillable — so it reflects what freelancing actually pays per hour.
Does it account for platform fees?+
Yes — you can include marketplace fees like Upwork's or Fiverr's alongside taxes and overhead.
