How to calculate your salary as a freelancer?

The average daily rate (TJM)

The average daily rate, or TJM, is an essential indicator for any freelancer. It corresponds to the amount charged excluding taxes for a day of work with a client.

This rate varies based on several factors: the industry, level of experience, specialization, geographical location, and, of course, market demand. To calculate a realistic TJM, it is important to consider not only your salary expectations but also non-billable days, such as periods of prospecting, training, or vacation.

On average, a freelancer works about 200 days a year. This means that the TJM must cover these interruptions, as well as social contributions and costs related to your activity.

Fixed and variable costs

The income of a freelancer is also influenced by fixed and variable costs. Fixed costs include mandatory social contributions (retirement, health, family allowances), administrative expenses, social protection, and sometimes subscriptions to professional tools.

Variable costs include travel expenses, material purchases, and client relationship expenses. For example, in wage portage, a portion of your revenue is deducted by the umbrella company to cover these costs and manage administrative aspects, which reduces your net salary. In a micro-enterprise or auto-entrepreneur setup, these costs are often calculated as a percentage of revenue.

Having a clear view of your cost structure is therefore essential for adjusting your TJM and anticipating your net income.

Time management

Time management is another key element that impacts your income as a freelancer. Unlike an employee, your billing directly depends on your ability to find and complete assignments.

Non-billable days – such as those spent searching for clients, managing administrative tasks, or taking breaks – must be taken into account in your income calculation. The TJM reflects the average of billable days, and effective planning of these periods is essential to maintain a steady flow of assignments.

Regularly reviewing your actual billing rate and the margins between your revenue and your remuneration will help you optimize your activity, whether you are in wage portage or an independent company.

Deducting professional expenses

Professional expenses encompass all costs related to your activity, such as travel expenses, material purchases, or subscriptions to essential tools. These expenses must be deducted from your revenue to obtain your taxable gross income.

It is essential to document these expenses well to maximize their tax deductibility. Rigorous management of your professional expenses can significantly improve your net income after taxes and social contributions.

Taxes and social contributions

The taxes and social contributions represent a significant portion of the deductions applied to your gross income. As a freelancer, these contributions include retirement contributions, health insurance, and other social security schemes.

For example, in France, social contributions can represent about 45% of your taxable gross income if you are an auto-entrepreneur or micro-entrepreneur. Additionally, income tax is calculated on your net taxable income, and its amount depends on your tax status as well as the options chosen, such as the flat-rate payment or the progressive scale.

Payments and invoicing

Managing your invoices is a key element of your freelance activity, as it directly impacts your gross income. Be sure to send accurate invoices on time to avoid payment delays.

Using management tools and income simulators can be very helpful for anticipating your financial needs and adjusting your invoicing according to your monthly net income goals.

Optimizing rates

To increase your income as a freelancer, it is essential to regularly readjust your average daily rate (TJM). Base these adjustments on your experience, market trends, and the complexity of the assignments you undertake. Highlight your specific skills, expertise in a particular sector, or any recent training to justify a rate increase. Don’t forget to consider the impact of inflation and rising social charges. It is recommended to reevaluate your rates at least once a year to maintain your purchasing power and profitability.

Diversifying income sources

Expanding your client portfolio is a key strategy for increasing your income. Retain your existing clientele by offering personalized follow-up and high-quality services. This helps stabilize your revenue over the long term.

Additionally, consider collaborating with other freelancers or complementary professionals on joint projects. This collaborative approach will allow you to access larger and better-paid assignments while developing your network and enhancing your professional reputation.

Financial planning and savings

Rigorous financial management is essential to maximize your net income. Plan your social and tax contributions to avoid surprises, and use appropriate management tools to closely track your monthly income and expenses. Building a dedicated savings can help you overcome lean periods and invest in training or materials, which will enhance your attractiveness to clients.

Finally, if you are in wage portage, consider using devices such as employee savings or company savings plans (PEE). These solutions allow you to optimize your overall remuneration while benefiting from tax and social advantages.

To correctly calculate your salary as a freelancer, it is essential to master your average daily rate (TJM), understand your social and tax contributions, and manage your working time effectively. By adjusting your rates, diversifying your income sources, and rigorously planning your finances, you can maximize your net income while ensuring the sustainability of your activity.

Don’t waste time: apply these practical tips now. Analyze your current revenue, adjust your TJM if necessary, and structure the management of your activity. Take the lead today to transform your freelance activity into a profitable and sustainable business.