Take-Home Pay = Gross Revenue - Taxes - Expenses - Savings
Most freelancers make two critical errors:
- Confusing gross revenue with income
- Underestimating the tax burden
| Line Item | Amount | % of Gross |
|---|---|---|
| Gross Revenue | $150,000 | 100% |
| Self-Employment Tax | -$22,950 | 15.3% |
| Federal Income Tax (est.) | -$25,000 | 16.7% |
| State Income Tax (avg) | -$7,500 | 5% |
| Health Insurance | -$9,600 | 6.4% |
| Business Expenses | -$8,000 | 5.3% |
| Retirement Savings | -$12,000 | 8% |
| Take-Home Pay | $64,950 | 43% |
Reality: $150k gross = ~$65k spendable income
2,080 hours/year (40 hrs × 52 weeks)
- Vacation: -80 hours (2 weeks)
- Sick/Personal: -40 hours
- Admin/Marketing: -400 hours (20%)
- Client gaps: -200 hours
Actual Billable Hours: ~1,360/year
$150,000 ÷ 1,360 hours = $110/hour minimum
Stop guessing. Get your exact minimum hourly rate based on:
- Your desired take-home (not gross)
- Your actual tax situation
- Your real expenses
- Your realistic billable hours
Free Calculator: https://hourly-rate-calculator.tp-business.workers.dev
Works backwards from your income goal to show exactly what you need to charge.
| Gross Revenue | Approx Take-Home | Min Hourly Rate |
|---|---|---|
| $75,000 | $40,000 | $55/hr |
| $100,000 | $50,000 | $75/hr |
| $150,000 | $65,000 | $110/hr |
| $200,000 | $85,000 | $150/hr |
Assumes 1,360 billable hours, average tax rates, $8k health insurance