Why your headline hourly rate is not your true rate
A freelancer's hourly rate has to pay for more than the time spent doing client work. It also has to cover tax, admin, unpaid sales time, software, equipment, sick days, holidays, and quiet periods between projects.
A practical way to calculate it
Start with your desired annual income, then add business costs and tax allowances. Divide that total by realistic billable hours, not total working hours. If you work 40 hours a week but only 25 are billable, your rate needs to reflect that difference.
What to review
Revisit your rate whenever your costs, availability, or target income changes. A rate that worked last year may be too low once you include new software, higher taxes, or fewer billable weeks.