Most freelancers and trades undercharge by 30-50% because they only think about hourly take-home, not the full math. Enter your real numbers below — get the rate you need to charge to hit your income target after self-employment tax and business expenses.
Most hourly rate guides oversimplify by dividing target income by hours worked. That ignores the two things that actually crush self-employed earnings:
1,500 billable hours/year is realistic, not pessimistic. A 40-hour week × 50 weeks = 2,000 working hours, but admin, sales calls, estimates that don’t convert, equipment maintenance, and quarterly tax prep eat 25-30% of that. If you’re a solo electrician or HVAC tech tracking utilization, 1,500 is a good year.
30% combined tax rate covers federal income tax (most self-employed land in the 22-24% bracket), self-employment tax (15.3% on the first $168,600 in 2026), and a buffer for state income tax. It’s the rule-of-thumb most accountants tell you to set aside.
10% profit margin is the cushion between “break-even on a perfect year” and “survive a slow quarter.” Without it, one bad month puts you in the red. Most healthy trades target 15-25%.