Recruiters anchor negotiations on base salary. Clients anchor on day rates. This page ties the two languages together by focusing on the net cash you could spend after predictable deductions—then backs into the freelance revenue needed to land there.
Why 1.2x salary is not enough
Rules of thumb like “add twenty percent” ignore the self-employment tax base, your state’s marginal stack,
uneven receipt timing, and months without billable work. A better approach starts from your target net,
layers tax and insurance, then solves gross outward.
Scope your bench and admin time
If only seventy percent of your year is billable, your effective rate must carry thirty percent overhead:
proposals, learning, invoicing, and gaps between engagements. Either inflate the annual revenue target or
adjust expectations on lifestyle spend.
Health coverage swings the break-even
Marketplace premiums move with household income and subsidy cliffs. A single assumption rarely fits two
people equally—re-run the calculator when your family situation changes.
FAQ
Does the solver include business formation costs?
One-off LLC filings are amortized mentally; recurring software, coworking, and insurance are in expense lines.
Why two people with the same salary need different rates?
Filing status, state, student loans, subsidies, and retirement choices move the goal posts.