topher
paper money

Freelancers and solo entrepreneurs need to watch their income pretty regularly. Here’s some math I do (some numbers made up to satisfy dreams).

Assume a pay rate of $150USD/hr, not working weekends, and a 10 day vacation in there. No sick days.

4 billable hours a day gets me also 4 to do Business, and I have an 8 hour day. So 4 billable is $600/day.

Without weekends and my vacation, there are 250 days in the year. So 600*260 comes out to 150,000.

I’m in a 30% tax bracket, so 45,000 goes to the government right off the top. Sometimes I get some back if I travel a lot (yay WordCamp!)

So that gets me $105,000 per year take home.

105000/12 is 8750/mo. /4 and you get 2187/week.

Do with that what you will. That would get you about 20 minutes of living in New York. You could live like a King in Nepal. You would do quite well in central US. It’s all about where you live, but the calculation stands, based on your hourly rate.

((((150*4)*250)*.7)/12)/4

Swap out the 150 and you get your weekly take home. I used the bc command in my terminal to do the math.

CC0 licensed photo by Roy Tanck from the WordPress Photo Directory.

One thought on “Freelancer’s Math

  1. Great Math.

    I think the biggest “lesson”, especially for budding freelancer / entrepreneurial types, is that 50/50 split of “on the business” type work and “billable work”.

    I’m pretty sure when I first went solo my thinking was 8 billable hours and then some admin on top because I don’t mind putting in the extra work. That probably ended up putting me at 15+hr work days in the beginning until I adjusted and at least laid some groundwork stuff on the admin side (templates, contracts, email config, basic website, business cards, design, etc.).

    The other advice for people at this stage is start really thinking about the customer/client experience BEFORE and AFTER you do the work. Typically we are very good at the delivering “what we do” side of things… at the expense of market perception in the beginning and end… which is actually a secret sauce to moving that rate up higher than just improving your delivery side… which is already probably quite optimized from your years of doing “that”.

    Lay as much of that groundwork ahead of going solo as possible… though admittedly it’s sometimes hard to figure out what you want the soup to taste like before you have actually dived in.

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