1. Your Personal Income Goal
$
Clean money in your personal bank account after all taxes and expenses.
2. Taxes & Overhead Costs
$
Software subscriptions, hardware, internet, accounting, coworking (~$800/mo).
%
Average freelance tax bracket is usually between 20% and 35%.
%
Safety fund for dry spells, equipment replacement, and business growth.
3. Capacity & Time Off
wks
Weeks per year you intend not to work.
wks
Public bank holidays + unplanned illness buffer.
hrs
%
Freelancers spend 30–40% on sales, emails, proposals, and admin. 60–65% is standard.
Recommended Hourly Rate
$123/hr
Includes 15% safety buffer
Day Rate (8h)
$984
Minimum Rate
$107/hr
Gross Revenue Distribution
$118,350
Take-home (0%)
Taxes (0%)
Expenses (0%)
Buffer (0%)
- Annual Working Weeks 46 wks
- Annual Billable Hours 1,136 hrs
- Billable Hours / Week 24.7 hrs
- Estimated Annual Tax $23,333
Disclaimer: For planning purposes only. Does not constitute certified tax or legal advice. Consult a licensed CPA for your specific jurisdiction.
Why Traditional “Salary ÷ 2,000” Math Destroys Freelancers
Many first-time freelancers make the fatal mistake of dividing their desired corporate salary by 2,000 hours (40 hours × 50 weeks). If you want to make $80,000, you might conclude: “$80,000 ÷ 2,000 = $40/hour.”
This formula leads straight to burnout and undercharging. As an independent contractor, you do not get paid for vacation, holidays, or sick leave. More importantly, at least 30% to 40% of your working week is consumed by non-billable overhead: replying to leads, writing proposals, issuing invoices, and keeping your skills up to date.
To walk away with $80,000 in clean personal income, your business must actually gross significantly more to cover self-employment taxes, business subscriptions, and unbillable downtime.