Question 1

How do I calculate my freelance hourly rate?

Accepted Answer

Start with your target annual salary, add the cost of benefits you'll pay yourself (health insurance, retirement), divide by billable hours (typically 60-75% of available work hours), then increase by your estimated tax rate (25-35% for most freelancers).

Question 2

Why can't I just divide my salary by 2,080 hours?

Accepted Answer

Because as a freelancer, you won't bill 40 hours every week. You'll spend time on marketing, admin, sales, and professional development. Most freelancers are only billable 60-75% of their available time. You also need to account for self-employment tax (15.3%) and benefits costs.

Question 3

What percentage of time is billable for freelancers?

Accepted Answer

Most freelancers are billable for 60-75% of their available work time. The rest is spent on marketing, business development, admin tasks, invoicing, and professional development.