How it’s calculated
We start from your billable rate and true billable hours (hours per week × working weeks) to get gross revenue, then take out everything that never reaches you: platform and processing fees, business expenses, self-employment tax (15.3% on 92.35% of net profit, US model), and federal income tax (2024 single-filer brackets with the standard deduction). What's left is your take-home — shown as a total, as cents kept per dollar billed, and as an effective take-home rate per billable hour. Adjust the rate until the take-home hits your goal.
gross = rate × hours/week × weeks net profit = gross − fees − expenses SE tax = 15.3% × 92.35% × net profit take-home = gross − fees − expenses − SE tax − federal tax
Worked example
Billing $120/hour for 25 billable hours a week, 46 working weeks, $6K annual expenses, and a 10% platform fee.
- Gross revenue: $138,000
- Platform fees $13,800 · SE tax ~$16,701 · federal tax ~$16,008
- Take-home: ~$85,491 — you keep about 62¢ of each billed dollar
- Effective take-home rate: ~$74/hour per billable hour
What’s a good number?
Most freelancers underestimate their needed rate by 30–50% because they divide a salary by 2,080 hours. You don't bill 40 hours a week — admin, sales, and gaps are real. 20–30 truly billable hours/week is typical for full-time freelancers.