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//// Career · Freelance Pricing

Contract Rate Negotiation Calculator

Know your number before you walk into the negotiation. Enter your income target, expenses, and benefits to get a walk-away floor, a target rate with profit margin, and a word-for-word client script.

Where this fits

💼 Income & OffersGoing 1099Offer ReviewFreelancersEmployees

This tool lives inside Going 1099 + Offer Review and is most useful for freelancers and employees.

SE Tax Rate15.3%
QBI Deduction20%
Quarterly DeadlinesApr · Jun · Sep · Jan

Income Target

Include Self-Employment Tax

Contractors pay both halves of FICA (15.3%). Toggle off only if covered by other employment.

Costs & Margin

Desired Profit Margin20%
10%50%
Never go below
Walk-Away Floor
$81/hr

Below this = losing money

Lead with this
Target Rate
$97/hr

20% margin

W-2 Equivalent
Salary Match
$167K

as full-time salary

Annual Cost Basis

Desired take-home$100,000
SE tax gross-up$16,454
Business expenses$6,000
Benefits$7,200
Total cost basis$129,654
÷ Billable hours1600 hrs
= Minimum viable rate$81/hr

Rate by Contract Type

Hourly

Min

$81

Target

$97
Day Rate (8 hrs)

Min

$648

Target

$778
Weekly Retainer

Min

$3,241

Target

$3,890
Monthly Retainer

Min

$10,805

Target

$12,965

How to Present This to a Client

Copy and personalize — lead with value, anchor on the target rate, mention flexibility:

"Based on my experience and the scope of this engagement, my rate is $97/hour — which comes to roughly $155,585 annually at standard utilization. I've structured this to include coverage for taxes, business expenses, and the overhead that comes with independent work. I'm flexible on project structure — hourly, weekly retainer, or milestone-based — whichever fits your workflow best. My floor is $81/hour to remain sustainable, but I'd love to find an arrangement that works for both of us."

Tip: Open at your target rate, not your walk-away. Every dollar of movement comes out of your margin, not your floor.

1

Annual Cost Basis

cost_basis = desired_take_home + SE_tax + annual_expenses + annual_benefits

= $100,000 + $16,454 + $6,000 + $7,200

= $129,654

Take-home is grossed up to cover SE tax (15.3% × 92.35% of net income).

2

Minimum Viable Rate (Break-Even)

minimum = cost_basis ÷ billable_hours

= $129,654 ÷ 1600 hrs

= $81/hr

This is your walk-away floor. Below this rate, you're subsidizing the client.

3

Target Rate (with Profit Margin)

target = minimum × (1 + profit_margin)

= $81 × (1 + 20%)

= $97/hr

4

W-2 Salary Equivalent

w2_equiv = target_rate × hours × 1.0765 (employer FICA)

= $97 × 1600 × 1.0765

= $167K

Contractor pays both halves of FICA (15.3%). A W-2 employer picks up half (~7.65%). This adjusts for the true comparison.

Use this result in →

Compare 1099 vs W-2 offer →Find your true hourly rate →

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