What do you actually make per hour?
Your billing rate isn't your real rate. After taxes, overhead, and all the hours you never invoice for — the number is usually a lot lower. Find out exactly where yours lands.
Your Work Reality
Total you invoice or get paid before any deductions
Hours you actually bill clients for
Emails, invoicing, proposals, calls, marketing
After vacation, sick days, and slow weeks
Software, equipment, insurance, workspace, etc.
The reality
You bill at
$83
per hour
You actually make
$37
per hour
Salary equivalent
$121,710/yr
W2 job with same take-home
Unpaid time per year
720 hrs
Admin, emails, proposals, etc.
The levers you can pull
- → Raise your rate: Every $10/hr billed rate increase adds $7.32 to your true hourly
- → Cut admin time: Reducing unpaid hours from 15 to 10/wk adds $4.57 to your true hourly
- → Elect S-corp: At $108,000/yr net, you may save $6,104 in SE tax
Share your result
I bill at $83/hr. My true hourly rate after taxes, overhead & unpaid time: $37/hr. Reality check via Propped → propped.org/calculators/true-hourly-rate
Want to improve that number?
Get guides on raising rates, cutting admin time, and structuring your business to keep more of what you earn.
Federal tax estimate based on 2025 rates. Excludes state income tax, NIIT, and health insurance deductions.
Common questions
What is a 'true hourly rate' and why does it matter?
Your true hourly rate is what you actually take home per hour of your life spent working — after taxes, expenses, and all unpaid time. It matters because most freelancers are optimizing for their billing rate when they should be optimizing for their true rate. A $200/hr consultant working 60 hours a week with high overhead can have a lower true rate than a $80/hr freelancer with lean expenses and a 35-hour week.
Why do taxes hit freelancers so much harder?
Two reasons. First, self-employment tax: you pay both the employer and employee share of Social Security and Medicare — 15.3% on top of income tax. Second, no withholding: employees have taxes pulled from each paycheck automatically. Freelancers have to set aside the money themselves and pay quarterly. Many get to the end of the year surprised by how much they owe.
How many hours of admin time is normal for a freelancer?
Research suggests freelancers spend 20–35% of their working time on non-billable activities — email, invoicing, proposals, client calls, marketing, bookkeeping. For someone working 45 hours a week, that's 9–16 hours per week of unpaid time. Over a year, that's 450–800 hours of invisible work.
What's the fastest way to increase my true hourly rate?
The fastest lever is raising your billing rate — it has an immediate, compounding effect on take-home with no extra hours required. The second lever is cutting admin time through better tools and processes (contract templates, automated invoicing, better onboarding). The third is tax optimization: tracking every deduction, contributing to a SEP IRA or Solo 401(k), and considering S-corp election if your net profit exceeds $60–80K.