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The Freelancer Rate Formula: Gross revenue target = (Desired Net Income Ă· Tax Reserve Multiplier + Business Expenses) Ă· Payment Fee Multiplier.
Billable Capacity vs. Total Hours: Freelancers average only 20â30 billable client hours per 40-hour work week due to unbillable sales, admin, accounting, and marketing time.
How many billable hours should a freelancer expect per week?
Full-time freelancers typically log 20 to 30 billable hours per week out of a 40-hour work week. The remaining 10-20 hours go toward marketing, invoicing, sales calls, and administrative work.
How much should freelancers set aside for self-employment tax?
In the US, freelancers typically reserve 25% to 35% of gross profits for federal, state, and self-employment taxes (FICA 15.3% plus income tax).
What is the difference between hourly and value-based project rates?
Hourly pricing charges for elapsed billable hours, while value-based project pricing charges based on project scope, deliverables, and business value generated for the client.