![]() They vastly underestimate all the work they do outside of their direct client work. To compensate for your effort, we apply a 75% increase to your hourly rate to account for all the other work you do to keep your business running outside of the actual delivery of your service.įirst-time solopreneurs often think of their “hourly rate” as the rate they are charging for their service, so they only charge for the hours they worked directly for their client! To compensate for your experience, we use a broad market rate of a 1% boost per year for each year of experience you have gained.įor example, if you have 3 years of experience in the service you want to provide, your hourly rate would be increased by 3%. ![]() We’ve designed our Lifestyle Calculator to compensate you for your experience and effort. If you’re calculating your hourly rate for the first time as a freelancer, consultant or coach, you will most likely undervalue your service. In the fields below your Total Hourly Rate, you can see how much time you need to put in to earn your desired income. #3 Your “Total Hourly Rate” will then be automatically calculated. #2 Then put your years of experience into the field to the right of “Years of Experience”. #1 Put your current hourly rate into the field to the right of “ Deliverable Hourly Rate”. To calculate your solopreneur hourly rate: To find out how much more you can get paid, on the first sheet of the Lifestyle Calculator, scroll down to the section “How Much Do I Need to Earn That?” Using our Lifestyle Calculator, you’ll be able to calculate how much more per hour you will be paid as a solopreneur compared to your current hourly rate as an employee. ![]() Our accountant Luke Frye recommends putting aside 30% of your revenue to have enough money to pay your income taxes. When you work for yourself, you’ll be paying your taxes on a quarterly basis based on your estimated income. Our Lifestyle Calculator not only includes the cost of your lifestyle needs, but it also includes your business and tax expenses, so you can calculate a more accurate hourly rate. Once you understand how much you really need to earn, then you can calculate how much you really need to work to earn your desire income! How much money do you need to live your ideal lifestyle? Not sure?Īs employees, we are taught to ask for higher and higher salaries as a symbol of our advancement and experience.Īs a solopreneur, you can reverse engineer your income by calculating how much you really need to earn based on your desire lifestyle needs. In a video I shared on LinkedIn, I share another exercise to demonstrate the impact your living expenses have on your time. Your hourly rate helps you prioritize your time, tasks and intentions to help you work more efficiently. When you start working for yourself, how much money you make each year matters less than your hourly rate. (Your Monthly Salary – Expenses) / (Offices Hours + Outside Office Work) = Now let’s calculate your more accurate hourly rate with this additional information: working outside of office hours at night and on weekends.If you’ve been working from home during the pandemic, I’m sure you noticed a drop in some of your expenses!įor your average number of hours worked each week, include time spent working outside of normal work hours and activities to support your work: home WiFi (estimated usage when you work from home).transportation (gas for car or fare for bus, subway or train).If you want to start thinking like a true solopreneur, our calculation isn’t quite done!įrom your monthly salary, subtract all expenses that enabled you to do your work like: ![]() Your Monthly Salary (after taxes) / Hours Worked Each Week (average) = Let’s get you started with a simple calculation by figuring out your current hourly rate or from your most recent salaried job. You’ll never treat your time the same way again once you calculate your hourly rate! Basic Hourly Rate Calculation
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