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Freelance Rate Floor Tables: 48 Scenarios, Computed

By Andrew James Flores, Nathan Management · Updated September 23, 2026 · Editorial Standards

Your rate floor is the lowest hourly price that still pays your income goal, your business costs and your time off, given the hours you can actually bill. The tables below work that number out for 48 combinations of income goal and billable hours, then show how far it moves when you take more weeks off, add a benefits budget or pay card fees. Find your row, read across to your hours, then check your exact numbers in the calculator.

The formula behind every table

Every rate in Tables 1 to 7 comes from one line of arithmetic, the same one the calculator uses:

floor = (income goal + business costs + benefits budget) ÷ (billable hours per week × (52 − weeks off) × share of billed money you keep)

The share you keep is your collection percentage times (1 − your payment fee percentage). Tables 1 to 6 set it to 100%, so the floor is simply your yearly budget divided by your yearly billable hours. Table 7 shows what happens when it drops.

The $6,000 cost figure is a round example for a laptop-based service business: software subscriptions, replacing a computer every few years, business insurance, accounting help, and the business share of your phone and internet. If yours is different, build it line by line with the business-cost checklist. At 1,200 billable hours a year, every extra $1,200 of costs adds $1.00 to the floor.

Rounding. Every hourly rate is rounded up to the next cent, the way the calculator rounds it, so a printed floor never falls below the exact figure. Yearly dollar totals are shown to the nearest cent. The calculator opens with a similar example that uses $5,000 of costs, which is why it shows $66.67 where Table 1 shows $67.50; enter 6000 in “Business operating costs ($/year)” and the two match.

Table 1 — Your floor, by income goal and billable hours

Rows are yearly income goals before personal taxes. Columns are billable hours per working week: the hours you invoice, not the hours you spend working. On a phone, swipe the table sideways to see all six columns; with a keyboard, focus the table and use the arrow keys.

Under these assumed inputs, a $75,000 goal needs $67.50 an hour at 25 billable hours a week and $42.19 at 40. The 40-hour column assumes every working hour is sold, yet sales calls, proposals, admin and bookkeeping also take time. Choose the column that matches hours you actually invoice: take the average weekly hours you billed over your last eight to twelve weeks. If you are new to freelancing, 20 to 25 is a common starting point.

Table 2 — The 2,080-hour shortcut, in dollars

The quickest way to turn a salary into an hourly rate is to divide it by 2,080. That number is 40 hours × 52 weeks, the paid hours in a full-time job, where holidays and vacation are paid and every hour counts whether or not a customer is billed for it. A freelancer is paid only for billed hours and also pays the business costs, so the shortcut comes out far too low. Table 2 compares it with the floor at 25 billable hours a week over 48 weeks.

At every income level the floor is 80% to 99% higher than the shortcut. Put the other way round, a rate set from salary ÷ 2,080 would sit about 45% to 50% below what this plan needs.

Table 3 — Where the gap comes from

Starting from the $75,000 shortcut, Table 3 adds the three differences one at a time, so you can see which one matters most.

Business costs and unbilled weeks together add $6.13 an hour. Selling 25 of every 40 working hours adds $25.31, about four-fifths of the $31.44 gap. The assumption to get right is your billable hours. If you are unsure, read the Table 1 column one step below the hours you expect.

Table 4 — What one more billable hour is worth

Holding the $81,000 yearly budget fixed, each extra billable hour a week lowers the floor. The effect is largest when you are lightly booked.

Going from 15 to 16 billable hours lowers the floor by $7.03; going from 35 to 36 lowers it by $1.34. Each added hour lowers the floor by less than the one before it, because the same $81,000 budget is spread over more hours. At $100 an hour over 48 weeks, one more billable hour a week adds $4,800 a year at any workload, while a $5 raise adds $3,600 a year at 15 hours a week and $8,400 at 35.

Author’s practice: below about 20 billable hours a week, work on volume first (repeat clients, a monthly retainer, a referral partner who sends steady work) and hold your rate. Above about 30 hours, the calendar has little room left, so price is the lever. Raise rates on new inquiries first, where a lost deal costs you nothing you already have, then move existing clients using the steps in raising rates with existing clients. In between, do some of both.

Table 5 — How time off changes the floor

Weeks with no billing shrink the hours that carry the same yearly budget. Count vacation, public holidays, sick days and quiet weeks between projects here.

Four weeks off costs $5.19 an hour on this budget, and each two-week step costs a little more than the one before: $2.49, $2.70, $2.94, then $3.20. Four to six weeks is a common starting point. Price the break in before you take it: the higher rate has to be earning for months before the time off arrives.

Table 6 — Adding a benefits budget when you leave a salaried job

If an employer paid part of your health insurance or matched your retirement contributions, those costs now come out of your rates. Table 6 sets the benefits budget at 25% of the income goal, a round illustrative figure chosen to show the size of the effect: at a $75,000 goal it sets aside $18,750 a year for premiums and retirement saving.

Replace the 25% with your own figures: the yearly premium for a health plan you would actually buy, plus the retirement contribution you intend to make. Enter that dollar total in the calculator’s “Personal benefits budget ($/year)” field and leave it out of “Business operating costs ($/year)” so it is counted once. At 1,200 billable hours, each $1,200 of benefits adds $1.00 to the floor.

Table 7 — What payment fees and unpaid invoices add

The earlier tables assume every invoice is paid in full with no card or platform fee. Table 7 shows what happens when you keep less of what you bill. The collection percentage is the share of invoiced money you eventually receive; the fee applies to the money you collect.

A 3% card fee adds $2.09 an hour, and writing off 5% of your invoices costs exactly as much as a 5% fee. If clients pay by card, either build the fee into the rate as shown or offer bank transfer. A payment that arrives late still counts as collected: it changes your cash timing, and the invoicing and net terms guide covers deposits, due dates and follow-up.

Put it together: a worked example

Assume you are leaving a salaried job and want $75,000 a year before taxes.

1. Start with Table 1. $6,000 of costs, 25 billable hours a week and 4 weeks off give $67.50 an hour.
2. Add benefits. An $18,750 benefits budget (Table 6) raises the floor to $83.13.
3. Add payment fees. If clients pay by card at 3%, the floor becomes $85.70 an hour, and you need to invoice $102,835.05 a year.
4. Round to a price you can quote. Author’s practice: round up to the next $5, here $90, so small surprises in costs or hours do not push you under the floor. In the calculator, enter $90 in “Current or proposed rate ($/hour)”: with these inputs it shows $80,010.00 of pre-tax income, $5,010.00 above the goal.

After you have your floor

Plan for taxes separately. The income goal is before personal taxes. Self-employment tax alone is 15.3% (12.4% for Social Security, up to a yearly earnings cap, and 2.9% for Medicare) applied to 92.35% of your net profit from self-employment, before any federal or state income tax. On $75,000 of net profit (the Table 1 goal with no benefits budget) that comes to about $10,597; with the worked example’s $18,750 benefits budget, net profit is about $93,750 and self-employment tax about $13,246. The self-employment tax guide walks through the calculation, and the estimated taxes guide covers the quarterly payments.

Then check the market. A floor tells you the least your plan can accept. The rate-by-skill guide and the benchmarking guide help you find out what clients in your field pay. If the market sits well below your floor, change the plan (costs, hours or income goal) rather than the arithmetic.

Check any number yourself

Take any cell’s income goal, add the costs and benefits in its caption, divide by billable hours per week times working weeks, divide by the share you keep, and round up to the next cent. For example, the $110,000 goal at 30 hours is ($110,000 + $6,000) ÷ (30 × 48) = $80.555…, printed as $80.56. The same inputs in the calculator give the same floor. If a figure does not match, tell us through Contact and it will be corrected.

Sources

• Rate formula used by the calculator (calc.js): Tables 1 to 7 use it.
• IRS — Self-Employment Tax (Social Security and Medicare Taxes): the 15.3% rate and its 12.4% and 2.9% parts.
• IRS — Topic no. 554, Self-Employment Tax: the 92.35% net-earnings factor.

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