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Infographic: How to Calculate Your Freelance Hourly Rate

HOW TO CALCULATE YOUR HOURLY RATE AS A FREELANCER 1. START WITH YOUR TARGET ANNUAL SALARY. I WANT TO KEEP MAKING $75K PER YEAR! $75000 2. CALCULATE NEW EXPENSES AND OVERHEAD. Now that you're self-employed, you'll have new expenses, tax obligations, and additional overhead that used to be subsidized by your employer. These expense projections will vary depending on age, location, marital status, and many other factors. COSTS OF DOING BUSINESS 目 1 e order of YOUL PAID $$ OFFICE SPACE /Co-WORKING MĒMBERSHIP WEB HOSTING INTERNET $360/YR WP Engine $1,020/YR (Get the fastest connection you can) INVOICING & ACCOUNTING SOFTWARE $4,200/YR WeWork $360/YR FreshBooks To Do: HELLO PROJECT MANAGEMENT TOOLS $45/YR TrelloGold PROMOTION/ MARKETING $1,200/YR (Ads, Business Cards, Flyers) PHONE NEW LAPTOP EVERY 2 YEARS $1,380/YR iPhone $600/YR (MacBook Air) 1040-ES ALLOWANCE FOR UNCOLLECTED PAYMENTS ACCQUNTANT FEES/TAX PREP $1,000/YR (You'll want professional help with paying quarterly taxes on income tax, utilizing write-offs, ànd cutting expenses) MISC. SOFTWARE $348/YR (Adobe CC, Stock Photo Credits, Productivity Tools) $1,500/YR (2% of revenue) COSTS OF LIVING You can count on a 7.65% increase on top of the income tax rate you were accustomed to, which covers your full contributions to Social Security and Medicare. When you're working full-time, your employer covers half of the Employment Tax (15.3% in total). Now that you are your own employer, you're responsible for covering the other 7.65% as well: Thankfully, the Employer portion of this tax is deductible. + HEALTHCARE COSTS SELF-EMPLOYMENT TAX $4,800/YR ($400/month average often subsidized by employer) $5,700/YR. NEW EXPENSES AS A FREELANCER: $22,513 3. ARRIVE AT YOUR NEW ADJUSTED ANNUAL SALARY. Target Salary. $75,000 New Expenses & Overhead.. $22,513 = Adjusted Annual Salary. $97,513 WHOA! 4. DETERMINE YOUR NUMBER OF BILLABLE HOURS PER YEAR. You're probably freelancing because you want: Ma flexible schedule Mmore vacation time Mholidays to spend with your loved ones WORKING HOURS PER YEAR: 2,080 3 WEEKS VACATION = 120 HOURS (15 EIGHT-HOUR DAYS) 7 U.S. HOLIDAYS = 56 HOURS (7 EIGHT-HOUR DAYS) 5 SICK DAYS = 40 HOURS (5 EIGHT-HOUR DAYS) TOTAL HOURS OFF PER YEAR: 216 2,080 HOURS 216 HOURS = 1,864 NOW, THIS ASSUMES THAT YOU'RE GOING TO BE BILLING A CLIENT FOR ALL HOURS OF WORK YOU DO EACH WEEK. HOWEVER, AS A FREELANCER, YOU'LL NEED TO SPEND TIME EACH WEEK SIGNING NEW CLIENTS, MAKING PHONE CALLS, EMAILING, MARKETING, PERFORMING ADMINISTRATIVE TASKS, AND MORE. ALLOW FOR 25% OF YOUR TIME TO BE SPENT ON NON-BILLABLE ACTIVITIES. 1,864 HOURS X .75 = 1,398 BILLABLE HOURS PER YEAR 5. DIVIDE ADJUSTED ANNUAL SALARY BY BILLABLE HOURS PER YEAR. $97,513 Adjusted Annual Salary 1398 Billable Hours per Year = $69.75 per hour rounded up to... $70 per hour YAY! NOW, CALCULATE YOUR OWN HOURLY RATE! Adjusted Annual Salary Billable Hours per Year = $. per hour Learn More About Launching a Freelance Career at: OVE OVE

Infographic: How to Calculate Your Freelance Hourly Rate

shared by theryanrobinson on Jul 19
Learning what to charge for your services as a freelancer is tricky business. Use this infographic to calculate your target freelance hourly rate today.


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