Texas Freelance Rate Calculator: What Should You Charge in TX?

Why Texas freelancers can price differently

Texas freelancers start with a real advantage: no state income tax. Every dollar of profit faces only the federal bill, so the revenue you need to cover your life is lower than in California or New York. That advantage disappears fast, though, if you use it as a reason to charge less.

The state also has strong client markets. Austin's tech companies, Dallas's corporate headquarters and Houston's energy and medical firms set budgets against good local salaries. Freelancers who price against those budgets keep the tax advantage as margin.

The five steps below build a Texas rate from your actual costs, and the worked example takes an Austin freelancer from $5,200 a month of living costs to a $110 quoted rate.

How to calculate your Texas freelance rate in 5 steps

1. 01

   Total your Texas cost of living

   Texas is cheaper than the coasts but not cheap everywhere. A one-bedroom runs about $1,400 to $2,000 in Austin, $1,300 to $1,800 in Dallas and Houston, and $1,000 to $1,400 in San Antonio or El Paso. Homeowners carry some of the highest property taxes in the US, often 1.6% to 2.2% of the home's value a year. Add car costs — most Texas cities assume you drive — and multiply your monthly total by twelve.

2. 02

   Add business costs, including health cover

   Texas did not expand Medicaid, and freelancers usually buy cover on the federal marketplace at $400 to $800 a month for a solo adult. Add software, hardware, insurance, a bookkeeper and coworking if you use it. Most Texas freelancers land at $12,000 to $20,000 a year of business costs including health cover.

3. 03

   Gross up for federal tax only

   Here Texas helps you: there is no state income tax, so your gross-up covers only 15.3% self-employment tax and federal income tax. A Texas freelancer at $100,000 of profit typically pays 22% to 26% combined. Divide your cost total by one minus that rate — roughly 0.75 — to find the revenue you need.

4. 04

   Divide by realistic billable hours

   Out of 2,080 working hours a year, freelancers usually sell 1,000 to 1,400 once holidays, sick days, admin and sales are taken out. Plan on 22 to 26 billable hours a week unless you have a long retainer that fills the calendar.

5. 05

   Price against Texas client budgets

   Austin's tech scene, Dallas corporate headquarters and Houston's energy and healthcare firms all pay well. A mid-level in-house designer in Austin costs a company $110,000 to $140,000 fully loaded — around $70 to $90 an hour before overhead. Quote 20% to 35% above your floor and point to what the client saves by not hiring.

A worked example: an Austin freelancer

A solo freelancer renting in Austin, buying marketplace health cover and billing about 24 hours a week. See how the missing state tax keeps the floor at $86.

Texas freelance rates by city

Typical hourly ranges for established Texas freelancers in 2026. Use them as context around your own math, not as a target to copy.

Eight signs your Texas rate is too low

Underpricing in Texas usually comes from treating a lower tax bill as permission to charge less.

• !You lowered your rate because “Texas is cheap”
• !Your gross-up still includes a state tax you do not pay — or no tax at all
• !Marketplace health premiums come out of your personal budget
• !You charge Austin startups the same as small local shops
• !Property tax and car costs are missing from your cost of living
• !You plan around 40 billable hours a week
• !Your rate has not changed since you moved to Texas
• !Every prospect says yes without asking about price

The Texas costs that generic calculators miss

Property tax is the first. Texas funds schools and local government through property tax rather than income tax, and rates of 1.6% to 2.2% are common. Renters pay it too, through rent. It belongs in your living costs even though it never shows up on a tax return.

Health cover is the second. Because Texas did not expand Medicaid, lower-income freelancers have fewer fallback options, and marketplace premiums are a real fixed cost. Treat them as a business expense inside your rate, and check subsidy eligibility every November.

Getting around is the third. Outside central Austin, most Texas cities are built for cars. Insurance, fuel and maintenance can easily add $600 to $900 a month, and a share of it is deductible when you drive for client work.

Selling to Texas client budgets

Texas has more Fortune 500 headquarters than almost any other state, and a fast-growing startup scene in Austin. Those buyers compare your rate with the full cost of an employee: salary, benefits, payroll tax, equipment and the time it takes to hire. That comparison usually makes a $110 rate look reasonable.

Out-of-state clients are the other lever. Many Texas freelancers work remotely for California and New York companies while paying Texas costs and Texas taxes. Quote those clients by their own market, not yours — that is where the biggest margins in Texas freelancing come from.

The trap is selling only to small local businesses on tight budgets. If that is your market, keep your costs lean and lean on packaged pricing, or move part of your positioning toward better-funded sectors.

Structure and paperwork

Most Texas freelancers start as sole proprietors and file a DBA if they use a business name. An LLC costs $300 to form, adds liability protection and needs an annual information report, but no franchise tax is due at normal freelance revenue.

The S-corp election is worth modelling once profit is steadily above $70,000 to $90,000. With no state income tax and no franchise tax eating into the savings, Texas is one of the better states for it.

Whatever structure you choose, keep a separate tax account and move 20% to 25% of each payment into it. The rate you calculated already includes that money — make sure it stays put.

Frequently asked questions