Transitioning from full-time employment to freelancing or consulting can be a shock when tax season arrives. Most developers make the critical mistake of taking their target annual salary and dividing it by 2,080 hours (40 hours × 52 weeks).
That calculation fails because it ignores three key realities of self-employment:
Self-Employment Taxes: You pay both the employer and employee portions of social security and Medicare (or national equivalents).
Non-Billable Admin Time: 20% to 30% of your week is spent on invoices, sales, emails, and learning.
Unpaid Time Off: Vacation, holidays, and sick days are 100% unfunded.
