Headline hourly rate is the start. Self-employment tax, unbilled admin time, expenses. The real number is often fifty to sixty per cent of the headline.
Headline rate, billable and admin hours, plus annual expenses.
Marginal income + self-employment tax combined.
Headline /hr after admin, expenses, and tax
Headline rate £60.00/hr → real rate £24.44/hr (41% of headline). Self-employment tax, unbilled admin, and expenses eat the rest.
Illustrative figures only. Self-employment tax structure varies by jurisdiction and income band; the model uses a single representative rate per market. For your specific situation, consult a qualified adviser.
Worth turns every income stream into a comparable hourly. The day job, the gig, the rental, the dividends. See what each hour is really worth. Join the waitlist.
Run the maths first. A real rate of forty per hour at forty hours a week and fifty weeks is around eighty-thousand a year. If the day job pays well above that all-in (salary, bonus, equity, benefits, employer pension match) then full-time side hustle is a step down. If it pays less, it may be a step up. Factor in healthcare, pension matching, and paid leave you would lose by going solo.
Hourly framing is for time-billed work. If you can switch to fixed-fee or value-based, you can earn much more per hour worked. Top freelancers and consultants effectively make multiples of their hourly using fixed-fee because they are paid for outcome, not time.
Because it is genuinely separate from income tax. UK Class 4 National Insurance and US self-employment FICA both stack on top of marginal income tax, so they erode the headline rate even further. The model uses a single representative rate per market; your actual rate depends on band and profit level.
The calculator shows the net hourly rate. From there, what you save versus spend is the same decision as any other income. Self-employment opens self-invested pension routes (UK SIPP, US Solo 401(k) or SEP IRA) that can shelter a real share of the net.