Know exactly
what you're earning.

How to set a freelance rate without guessing

One of the most common mistakes new freelancers make is picking a number that "sounds about right" — usually one that quietly leaves them earning less than they would in a regular job once you account for everything they have to cover themselves. The calculator above works backwards from the life you want to fund, rather than forwards from an arbitrary hourly figure.

Billable hours are not the same as working hours

If you sit at your desk for 40 hours a week, you will not bill 40 hours. Time disappears into invoicing, chasing payments, marketing, client calls, admin and learning. For most freelancers, somewhere between 60% and 75% of working time is genuinely billable. Setting your rate as if every hour is billable is the fastest route to overwork and underpayment.

Costs you must build into the rate

• Software, subscriptions and equipment
• Health insurance, which an employer would normally subsidise
• Accounting and professional fees
• Time off — holidays and sick days are unpaid when you work for yourself
• Self-employment and income tax

Always add a buffer

Freelance income is lumpy. Some months overflow with work; others are quiet. A buffer of 15–25% built into your rate cushions the slow stretches and the late-paying clients, so a thin month does not become a financial emergency. If the rate the calculator gives you is higher than what you currently charge, that gap is the amount you have been quietly subsidising your clients.

Why freelancers pay tax four times a year

When you are employed, tax is withheld from every paycheck automatically. As a freelancer, nobody does that for you, so the IRS asks you to pay as you go through quarterly estimated payments. Skipping them does not just create a large bill in April — it can also trigger underpayment penalties on top of the tax you already owe.

2026 quarterly due dates

The safe harbor rule, in plain English

You can avoid underpayment penalties if you pay either 90% of the tax you will owe this year, or 100% of what you owed last year (110% if your prior-year income was above $150,000). Paying based on last year's figure is often simpler, because you already know that number with certainty.

A system that makes this effortless

Open a dedicated tax savings account and move 28–32% of every payment into it as the money arrives. When each quarterly deadline comes around, you simply pay from that account. The estimator above annualises your year-to-date numbers to project what each quarterly payment should be.

How to price a project without leaving money behind

Flat-rate project pricing is one of the biggest levers a freelancer has, but it is easy to get wrong. Quote too low and you resent the work; quote without structure and scope creep quietly eats your margin. A good quote is really a small contract, and it protects both you and the client.

Quote the project, not the hour

Clients who fixate on your hourly rate tend to watch the clock. Clients who see a project price focus on the outcome they are buying, which is what they actually care about. Project pricing also rewards you for getting faster and more skilled, rather than punishing efficiency.

The four parts of a solid quote

• Core labour: your honest hour estimate multiplied by your rate. Estimate generously — coming in under budget is far easier than asking for more.
• Revisions: state how many rounds are included. "Unlimited revisions" is a trap; two or three rounds is standard.
• Hard costs: stock assets, software, subcontractors. Mark these up to cover the time you spend managing them.
• Contingency: a 10–15% buffer for the surprises that happen on almost every project.

Always take a deposit

Collecting 50% upfront does two things at once: it filters out clients who were never serious, and it protects your time if a project stalls or collapses. A serious client will not blink at a deposit — it is standard practice across the industry.

How taxes work for DoorDash and other delivery drivers

If you drive for DoorDash, Uber, Lyft, Instacart or any similar platform, you are not an employee — you are an independent contractor. The platform reports your earnings on a 1099 form and withholds nothing. That means the full responsibility for tax sits with you, and it works very differently from a regular paycheck.

The mileage deduction is the most important number you have

Here is the part that changes everything for drivers: you can deduct your business mileage. For 2025 the standard mileage rate is $0.70 per mile, and that deduction comes straight off your gross earnings before any tax is calculated. A driver who earns $40,000 but logs 20,000 business miles only pays tax on roughly $26,000 of profit, not the full $40,000. The miles you drive between deliveries, and while waiting for orders with the app on, generally count too — not just the miles with food in the car.

What counts as deductible mileage

• Driving to a restaurant to pick up an order
• Driving to deliver to the customer
• Driving between deliveries and while waiting for the next order with the app on
• Driving to a busy zone to start your shift, in many cases

Commuting that is unrelated to work does not count, which is why a reliable mileage log matters so much. Apps like the ones above record this automatically in the background.

Standard mileage versus actual expenses

There are two methods to deduct vehicle costs. The standard mileage method multiplies your business miles by the IRS rate and is simpler. The actual expense method adds up fuel, insurance, repairs, depreciation and more, then deducts the business-use percentage. For most gig drivers the standard mileage method is both easier and more generous, which is why the calculator above uses it. You generally have to choose the standard mileage method in the first year you use a vehicle for work if you want the option to switch later.

Set money aside as you earn

Because nothing is withheld, the same discipline that helps freelancers helps drivers: move roughly 25–30% of your net profit into a separate account as you go, and pay quarterly estimated taxes so you are never blindsided in April.