Team & hiring
Take-Home Target
Formula reviewed by Tahir Asif, CMA
The amount a self-employed person wants left to spend after business costs, taxes, health insurance and retirement savings.
A take-home target is the starting point for pricing a freelance business. Working backward, the revenue needed is the target plus business expenses, self-employment tax, income tax, state tax, health insurance and retirement savings, adjusted for any platform fees and invoices that are never paid.
Because self-employment tax and income tax rise with profit, the share of revenue that goes to tax is not a single rate. It is lower at small incomes and higher at large ones, so a guessed flat rate is right at some incomes and wrong at others.
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