Salary to freelance rate converter

The calculator The rate a salary really costs

Pricing your own time so a salary swap actually pays is covered in The One-Person AI Business — Basics →

How to read it Why the rate usually needs to beat salary ÷ 2080

The quick way to convert a salary into an hourly rate is to divide it by the 2,080 hours in a nominal full-time year. It also usually understates a sustainable rate. That naive figure assumes every working hour is paid, that leave is free, that no one else covers your taxes or benefits, and that you never spend a minute selling or invoicing. As an employee, all of that was quietly carried for you. As a one-person business, it isn't — so the freelance rate that replaces a salary has to sit well above it.

Read the result as a floor. It's the lowest rate that leaves you as well off as the salary once you've paid for the things an employer used to. It is not what the market will pay — the market sets the ceiling, and it neither knows nor cares what your old package was worth. If your floor sits above what clients in your niche will pay, that's a signal to change something (more billable hours, a leaner uplift, a different niche), not a number to apologize for.

The formula, in full

Freelance annual target = salary × (1 + uplift ÷ 100) — grossing the salary up so the extra cost of being self-employed is built into what you aim to bill. Billable hours a year = billable hours a week × working weeks a year. Hourly rate = target ÷ billable hours: the total you must bill, spread across the hours you can actually charge for. Day rate = hourly × 7.5, a standard billable day.

A worked example

You want to replace a $60,000 salary, apply a 30% self-employed uplift, and can bill 25 real client hours across 46 working weeks. The uplift takes the target to $60,000 × 1.30 = $78,000 a year. You have 25 × 46 = 1,150 billable hours to bill it in, so your hourly floor is $78,000 ÷ 1,150 = $67.83. A standard 7.5-hour day, worked from the unrounded hourly rate, is ($78,000 ÷ 1,150) × 7.5 = $508.70. Charge below that and the difference — the employer taxes, the retirement match, the health and other benefits you now fund yourself — comes out of your own pocket.

Edge cases the calculator handles

• Zero billable hours (or zero working weeks) means there are no hours to spread the target across, so the hourly and day rate are undefined and show —. You can't divide a target by nothing. The annual target still shows, since it doesn't depend on hours.
• A zero uplift is allowed but rarely wise — it prices the salary as if self-employment cost you nothing extra, which is the very trap this tool exists to avoid.

Common questions

Why can't I just divide the salary by 2,080?

Because 2,080 hours is a fiction for a one-person business. It counts hours you'll spend on vacation, off sick, or between clients as if they were billed, and it ignores the sales, admin and email that eat a third to a half of every real week. Divide by 2,080 and you're quietly working the unpaid hours for free and paying your own benefits and taxes out of a rate that never allowed for them.

What uplift percentage should I use?

The uplift is a rough allowance, not a precise figure — a common starting point is somewhere around 25–50%, and 30% is a reasonable middle. It stands in for the cash an employer used to add on top of salary: the employer's share of Social Security and Medicare, health and other benefits, a retirement match, and insurance. Time off, downtime and unbillable admin are already covered by the lower billable hours and working weeks you enter, so don't count them again here. The right number depends on your benefits gap, so tune it to your situation before you rely on it.

Is this financial or tax advice, or a guarantee of income?

No. It's arithmetic on numbers you enter, and it is not financial or tax advice. The uplift is a rough allowance you should tune to your own country and situation, and the result tells you the rate your own figures require — not what any client will agree to pay, and not what you'll earn. The market sets the ceiling; this only shows you the floor.