Determine your ideal billable rate to hit your target take-home salary after taxes, business overhead, and vacations.
A common mistake among new freelancers is dividing an employee salary by 2,000 hours (40 hours × 50 weeks). In reality, freelancers must account for unbillable work (accounting, client outreach, revisions), paid time off, equipment depreciation, and self-employment taxes.
A reliable freelance formula: Total Required Revenue = (Target Net Income ÷ (1 - Tax Rate)) + Business Expenses. Then divide by your actual billable hours (typically 1,000 to 1,200 hours/year) to find your minimum viable hourly rate.