Why this tool exists
New freelancers often start with an employee salary, divide it by 2,080 hours, and call the result an hourly rate. That shortcut ignores the unpaid work required to find clients, run the business, maintain skills, and manage administration. It also assumes that time off and business expenses will somehow fund themselves.
RateFloor was created to make those missing assumptions visible. Its job is narrow: answer the question, "What is the minimum hourly and day rate this annual plan can sustain?" It is not a marketplace, a quote guarantee, a tax filing product, or a substitute for professional advice.
A formula that can be inspected
The calculator uses a reverse margin and utilization model. It first determines realistic annual billable hours from working weeks, total weekly hours, and billable utilization. It then reverses a target take-home amount through fixed costs, variable overhead, and an estimated tax set-aside to find required gross revenue.
Required gross revenue is divided by annual billable hours to produce an exact rate floor. The recommended hourly quote rounds upward to a whole dollar. The day rate uses the rounded hourly quote, the full standard workday, and an editable reservation premium. Billable utilization is not applied twice.
Every assumption is editable, every result is labeled, and invalid inputs stop the calculation visibly. The calculator does not silently cap a percentage or replace an empty value.
How reference data is reviewed
The optional occupation comparison uses U.S. Bureau of Labor Statistics Occupational Employment and Wage Statistics data. The current dataset references May 2025 national cross-industry estimates released in May 2026.
Each displayed freelance role is mapped to a Standard Occupational Classification code. Direct matches are labeled exact. Broader or adjacent roles are labeled nearest. The dataset records the BLS occupation title, mapping type, hourly p25, median, p75, p90, and annual median.
OEWS covers wage and salary employees and excludes self-employed workers. RateFloor therefore describes these values as employee wage references, never as official freelance market rates. The comparison can be unavailable without affecting the core calculator.
Our publishing standards
Trust comes from an inspectable method, current source labels, clear limitations, and a correction channel. RateFloor does not claim CPA review, government approval, or a large team. It does not publish invented reviews, ratings, or usage numbers.
Material formula, policy, or data changes receive a visible review date. Source constants are generated through a deterministic offline script with schema, percentile-order, and file-size checks.
If you find a calculation issue, unclear explanation, or source mismatch, email [email protected]. Include the page, the value in question, and a source link when possible.