Start with the annual salary you'd want as an employee, add 25–50% for self-employment taxes, health insurance, and business expenses, then divide by your expected billable hours. At 30 billable hours per week for 48 weeks (1,440 hours), a target income of $108,000 means charging $75/hour. Many freelancers bill only 60–70% of their working hours, so account for unbillable administrative time.

Using 48 weeks accounts for approximately four weeks of unpaid time throughout the year, including vacation, sick days, holidays, and gaps between client projects. Freelancers don't receive paid time off, so building this buffer into your calculations ensures more realistic income projections. Some freelancers use even fewer weeks depending on their industry and client pipeline.

Freelancers should typically set aside 25–35% of their gross income for taxes, including federal income tax, state income tax, and self-employment tax (15.3% for Social Security and Medicare). Setting up a separate savings account for tax money and making quarterly estimated payments helps avoid a large tax bill at year end. Consult a tax professional for advice tailored to your specific situation.