Pricing your services with tax in mind
Many freelancers underprice because they quote based on gross revenue targets instead of take-home goals.
When setting rates, include your non-billable time, overhead costs, and estimated tax burden. This gives a realistic floor price that keeps your business sustainable.
If you regularly increase workload but take-home pay does not improve, pricing is usually the bottleneck. Use your recent tax estimates to check if your margin is healthy enough.
Review pricing at least every 6 to 12 months, especially after major cost changes or shifts in demand.
Key points
- Price for net take-home, not only top-line revenue.
- Build tax and expense coverage into every quote.
- Review rates on a fixed schedule.