Freelancer Pricing Case Example
This case walks through what a freelance hourly rate actually leaves in your pocket after the real costs of being self-employed.
The problem
Freelancers often price by comparing to other freelancers, forgetting that hourly rate is not income — it's gross revenue.
A small business example
Rate: $50/hour. Billable hours: 100/month → revenue $5,000.
Business expenses (software, equipment, accounting): $600. Tax + social contributions estimate (~25%): $1,100.
Take-home ≈ $3,300/month for full-time work.
What the numbers mean
Half-time work at this rate would leave the freelancer below most cost-of-living thresholds.
Practical interpretation
Hourly rate must include unbillable time (admin, sales, learning) and the real share that goes to tax and overhead.
Action points
- Calculate realistic billable hours (rarely above 100/month full-time).
- Add overhead and tax to the desired take-home BEFORE setting a rate.
- Raise rates on new clients first, before existing ones.
- Track take-home, not just invoices sent.
Need to calculate this? Visit SME Finance Helper.
Related reading
This article is for educational and planning purposes only. It is not accounting, tax, legal, investment, or financial advice.