Freelance & Contract Work: Estimating Real Take-Home Pay
Freelancers and independent contractors face unique challenges when estimating take-home pay...
Self-employment tax
You are responsible for both employer and employee portions...
Tracking expenses
Business expenses reduce taxable income...
Quarterly taxes
Unlike W-2 employees, freelancers must pay quarterly estimates...
Budgeting tips
Set aside 25–30% for taxes, build emergency savings...
💡 Try it yourself with our Hourly → Salary Converter.
Building a Realistic Rate
Start with your target take‑home, add expected taxes, add business expenses, and divide by your billable hours. Adjust for utilization (you won’t bill 40 hours every week). Many freelancers use 20–30 billable hours as a planning baseline.
Contracts & Scope
Use clear scopes to avoid scope creep. For long engagements, propose retainers or milestone billing. Predictable cash flow is as valuable as a headline rate.
Tools & Habits
Time tracking and simple accounting help you stay on top of taxes and profitability. Review effective hourly rates monthly so you can adjust pricing or scope if needed.