Vocations · Career Exploration

Freelance, with the
numbers checked first.

Freelancing works when the rate, the hours you can actually bill and the taxes add up to more than your costs, with savings for slow months. Enter those numbers and the checklist works out monthly gross and take-home, then walks through the twelve things new freelancers most often skip, from a contract template to quarterly estimated taxes. Save a check each time your plan changes.

Run a readiness checkWhat you get

Readiness checks

The worked example is made up: a graphic designer checking twice, three months apart, and a math tutor. Saved on this device only.

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What you get

Vocations · Career ExplorationFree

What you finish with
A record per readiness check: service, hourly rate, billable hours a week, tax set-aside, monthly costs, months of savings and a twelve-item checklist. Works out monthly gross, take-home and the surplus or shortfall and compares checks over time; flags a shortfall, a set-aside under 15.3 percent, under three months of savings and more than 30 billable hours a week.
Who it is for
Students and adults considering freelance or gig work: designers, writers, tutors, developers, tradespeople and creators.
Format
Browser checklist with a saved record per check. Prints one check, all of them in a table or a blank checklist; downloads a spreadsheet (.csv); exports and imports a file.
Access
Free. No account, no sign-in and nothing to install. Everything you type stays in this browser; nothing is sent to Caveat.
Where it lives
The Career Exploration space in Caveat Vocations.
Support
Questions about access, an order or a correction: team@caveatacademic.com.

How to use it

  1. Enter a realistic rate and the hours you could bill.
  2. Set aside a share for taxes.
  3. Enter your monthly costs and savings.
  4. Work the twelve-item checklist.
  5. Run it again when the plan or the rate changes.

Run a readiness check

Freelance numbers

From an hourly rate to take-home pay1Rate × billable hours$55 × 18 hours a week.2× 52 ÷ 12About $4,290 a month, gross.3Set aside for taxesSelf-employment tax is 15.3%before income tax.4Subtract costsLiving costs plus software,insurance, fees.5Plan for slow monthsThree to six months ofsavings.6Check againAfter the first three clients.From an hourly rate to take-home pay1Rate × billable hours$55 × 18 hours a week.2× 52 ÷ 12About $4,290 a month, gross.3Set aside for taxesSelf-employment tax is 15.3% beforeincome tax.4Subtract costsLiving costs plus software, insurance,fees.5Plan for slow monthsThree to six months of savings.6Check againAfter the first three clients.
Billable hours are the hours you can charge for. Most freelancers spend a large share of their week finding work, invoicing and on admin.

Taxes work differently

A freelancer pays self-employment tax, 15.3 percent of net earnings for Social Security and Medicare, plus income tax. With no employer withholding, the IRS expects estimated payments during the year, usually due in April, June, September and January. A tax professional can help with your own numbers.

Billable hours are not working hours

Finding clients, quoting, invoicing, revisions and admin are unpaid. Many freelancers can bill only about half to two thirds of the hours they work, which is why the rate has to be higher than a comparable hourly wage.

Sources

  1. Internal Revenue Service (irs.gov): Self-Employment Tax (Social Security and Medicare taxes); Form 1040-ES estimated tax and due dates.
  2. U.S. Small Business Administration (sba.gov): licenses and permits; separate business banking.
  3. Bureau of Labor Statistics (bls.gov): contingent and alternative employment arrangements.
  4. Freelancers Union (freelancersunion.org): contracts and getting paid.

The worked example is made up. Figures are estimates for planning, not tax advice; income tax depends on your whole situation. Nothing you type is sent to Caveat. Support: team@caveatacademic.com.