Your MAR is the floor — the rate below which you lose money. Your target rate is what you actually aim to charge, and it should sit comfortably above the floor: typically 20–50% higher, depending on demand, experience, and niche. Think of MAR as the walk-away line in any negotiation and the target rate as your opening position. If every client is saying yes instantly, your target rate is probably too close to your MAR — raise it.

Because 2,080 billable hours a year is a fantasy for most freelancers. Real weeks include proposals that don't win, admin, invoicing, learning new tools, marketing yourself, and the gaps between projects when you bill zero. Most independent freelancers bill 15–30 hours a week for 44–48 weeks a year. Using a fantasy capacity is the most common way the MAR math lies to you: inflate the denominator and the floor looks cheap — then you hit the year-end shortfall for real.

Add your marginal federal income tax rate, your state income tax rate (0% if your state has none), and your self-employment tax of 15.3% — then use that total as a planning estimate. For a US freelancer in the 22% federal bracket with 5% state tax, that lands around 37% before deductions. Most freelancers end up somewhere between 25% and 40% as a working number. This is a simplified planning estimate, not a tax calculation: deductions, credits, and filing status change the real number, so check with a tax professional for your situation.

Enough that demand still pushes back a little. If your MAR is $87/hour and you charge $90, you have almost no shock absorber — one slow month wipes out the buffer. A common practice is to set the target rate 20–50% above MAR and the published rate higher still, so you have room to negotiate down without crossing the floor. Specialists with strong demand can sustain much larger gaps; the floor only tells you where you cannot go, not where you should land.

Estimate the project's hours honestly, multiply by your MAR, and that is your floor project price — the number you cannot quote below. Then quote above it based on the value to the client and your target rate. The danger with fixed pricing is underestimating scope: if a "20-hour project" takes 40, your effective rate gets cut in half. Either pad the estimate, cap revisions and scope in writing, or price fixed projects from your target rate rather than the floor so overruns don't push you under it.

Everything the business costs you to exist: software subscriptions, cloud storage, hardware replacement fund, business insurance, marketing and website costs, accounting or bookkeeping, courses and certifications, coworking or home-office costs, and the fees platforms take from your earnings. Most freelancers are surprised how fast the list grows — $5,000–$15,000 a year is typical for a solo knowledge worker. Miss a category and your floor is set too low by exactly that amount.

Then the math is telling you something honest: your current model doesn't support your income goal. You have four levers: bill more hours (raise utilization), raise the tax/expenses assumptions only if they were wrong, cut expenses, or raise rates — often by repositioning into higher-value work rather than charging more for the same. What you cannot do is accept below-floor rates and hope volume fixes it; volume at a loss just scales the loss. Re-run the calculator with honest numbers until the floor fits the market you can actually reach.

Yes — through the billable weeks input. A freelancer takes unpaid vacations, holidays, and sick days, plus the gaps between projects. That is why the default is 46 weeks instead of 52: six unpaid weeks a year is a realistic starting point. If you plan to take more time off, lower the weeks; each week you remove raises your hourly floor, which is exactly right — fewer working weeks means each billed hour has to carry more.

Often, yes. New freelancers face the most volatile income — slow starts, feast-or-famine cycles, and pricing mistakes while they learn. A 15–20% buffer is a reasonable planning cushion early on. Established freelancers with full pipelines and retainer clients can run leaner, around 5–10%, because their slow months are rarer and shallower. The buffer is not profit you must take; it is insurance priced into the floor.

At least once a year, and whenever something material changes: rent goes up, you add a software subscription, your tax bracket shifts, you want to work fewer hours, or your income goal rises. Inflation alone quietly raises the floor every year — a rate that cleared your costs in 2024 may be below your floor in 2026 without you noticing. Make MAR a standing item in your annual business review, not a one-time calculation.