How to Calculate Your Freelance Hourly Rate & Project Quotes
Pricing your freelance services properly requires looking beyond your desired salary. Unlike traditional salaried employees, freelancers must cover business overheads, unpaid administrative tasks (client communication, invoicing, marketing), self-employment taxes, and uncompensated time off.
Key Pricing Formulas
- Gross Target Revenue:
(Net Income + Overheads) / [1 - (Tax % + Profit Margin %)] - Billable Hours per Year:
[(52 - Vacation Weeks) × (Weekly Hours × Billable %)] - (Sick Days × Daily Billable Hours) - Minimum Hourly Rate:
Gross Target Revenue / Total Annual Billable Hours - Project Quote:
(Estimated Project Hours × [1 + Revision Buffer %]) × Minimum Hourly Rate
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