The itemized list
Typical annual numbers for a solo U.S. developer or consultant targeting a six-figure income. Yours will differ; zeros are rarely honest:
| Cost | Typical annual | Notes |
|---|---|---|
| Employer half of FICA | $8,000–10,000 | ~7.65% of income — the invisible pay cut |
| Health insurance | $6,000–14,000 | Solo premium + deductible exposure |
| Retirement match you lost | $4,000–8,000 | Nobody matches your Solo 401(k) but you |
| Software & services | $1,500–4,000 | IDE, SaaS, hosting, AI tools, password manager, backups |
| Hardware on a cycle | $1,000–2,500 | A $3,600 laptop every 3 years is $100/month |
| Insurance (E&O / liability) | $500–2,000 | Increasingly required by client contracts |
| Accounting & legal | $800–2,500 | Tax prep, contracts reviewed once, LLC filings |
| Workspace | $0–4,800 | Coworking or the home-office deduction's real costs |
| Marketing & sales time | 10–20 hrs/week | Not a dollar line — a billable hours line, which is worse |
| Dry spells & dead invoices | 5–15% of revenue | The safety margin in your rate exists for this |
Sum the middle column and the dollar overhead alone runs $22,000–48,000 a year before a single unbillable hour is counted. This is why the rate math starts from required revenue, not desired salary.
The two that hurt the most
Unbillable time is the giant: at a $140 rate, fifteen weekly hours of sales, admin, and email is $109,000 a year of time you can't invoice. You don't eliminate it — you price it in, by dividing your revenue target by honest billable hours instead of theoretical ones.
The dry spell is the one that ends freelance careers. Two slow months aren't an emergency if every busy month carried a 10–15% margin above break-even; they're a catastrophe if your rate was set to exactly cover a good month. The margin isn't optional. It's the subscription fee for staying independent.
What to do with this list
- Put real numbers in each row — yours, not the table's.
- Feed the totals into the rate calculator as overhead and benefits.
- Re-check twice a year. Overhead creeps; rates should too.
turn_the_list_into_a_rate
The free calculator folds overhead, taxes, and honest utilization into your minimum hourly rate. The $29 workbook keeps it all on tunable sheets, plus project quoting, proposals, and an income tracker.
Free Rate Calculator Full Workbook — $29