Freelance TJM calculation and net income: simulate your salary
Before diving into the details, let's quickly recall what the TJM (Average Daily Rate). That's how much you charge per day you work as an independent consultant. Calculate your TJM In a fair manner is essential to ensure the profitability of your freelance business.
How do you define your TJM as a freelancer?
In order to Define your TJM In freelancing, several points should be taken into consideration.
Your experience:
Your experience is a fundamental factor in determining your TJM. The more you have accumulatedyears of experience in your field, the higher TJMs you can expect. Experience shows that you have acquired skills, gained expertise and developed a professional network. Customers are often willing to pay more for the expertise of an experienced consultant. For example, A project manager with 5 years of experience can legitimately ask for a higher TJM than a beginner, as it brings a thorough understanding of the sector, past successes and a more developed strategic vision.
The consultant's level:
The skill level you bring to a project directly influences your TJM. Customers are often looking for experts who are able to provide excellent results. For example, an IT consultant who specializes in rare and sought-after technology may ask for a higher TMR than someone with more common skills. Your TJM may reflect the scarcity of your skills, your ability to solve complex problems, and the added value you bring to the project.
Customer request:
Customer demand is an external factor to take into account. If a client has an urgent and specific need and you are the ideal consultant for the job, you will be able to negotiate a higher TMR. Les specific skills that you own, and that are in high demand, can allow you to set higher rates.
Geographical location:
Where you do business has a significant impact on your TJM. Rates vary considerably from region to region due to differences in cost of living And of the Market demand. For example, freelancers based in Paris tend to ask for higher TJMs than those in Lille, as the cost of living in Paris is higher and the demand for freelance services is generally higher. When determining your TJM, consider location to stay competitive on the market while covering your personal expenses.
Your operating costs:
To calculate your TMR, it is essential to take into account your operating costs. These costs include fixed expenses (such as rent, telephone bills, Internet access), variable loads (such as material costs, project-related travel), costs of Mutual and, of course, the taxes. By adding up all of these costs, you can determine your minimum income needed to cover personal and business expenses. Knowing these costs is crucial to setting a TJM that allows you to live comfortably while maintaining your profitability as a freelancer.
Determine the days worked and the time not billable:
When we are freelancing, many of the advantages available in business disappear. No RTT, presence of periods of inactivity (without unemployment benefit), time spent on administrative tasks. All of these elements need to be taken into account.
Therefore, pay particular attention to:
→ In the number of days worked monthly
→ To anticipate the number of vacation days
→ To estimate the time you will spend at non-billable tasks
Our advice for calculating your TJM as a freelancer
Analyze the prices ofThe competition:
Studying the competition is essential to establish competitive rates. Examine what your competitors are doing in your field. Look at the TJM that they charge and the services that they offer. This will give you a solid basis for setting your own rates.
If you find that most of your competitors charge a given TJM, it might be a good idea to align yourself with that rate, at least at the beginning. However, if you can demonstrate that you are bringing a additional value, don't be afraid to ask for a Slightly higher TJM.
It is still necessary to offer daily rates consistent with the reality of the market.
→ One TJM too high compared to competitors may be disadvantageous because you may exceed customer budgets.
→ In addition, a TJM too low can leave customers suspicious about the quality of the service.
Know how to sell yourself :
It is crucial to justify your TJM by highlighting your assets. Don't sell off your services by offering too low rates, as this may mean lower quality. Highlight your experiment, your trainings And your skills specific. Make it clear how you are an asset to the customer. Be specific when writing your quotes, detailing the services that you are offering and the pros that the customer will get out of it. Show how your expertise can solve customer problems and improve customer outcomes. The more your customer understands the value you provide, the more likely they are to accept a higher TMR.
See large:
When setting your TMR, don't underestimate the time needed for a project. Take into account the Unexpected And the potential delays. Projects don't always go according to plan, and factors such as scope changes, customer delays, or technical issues can lead to deadlines being missed. Your average daily rate should take all of these factors into account to keep your business profitable. Consider including a margin of safety in your quotes to deal with the unexpected. This will allow you to manage projects more flexibly and maintain the profitability of your business.
CFreelance TJM calculation: What are the steps?
The formula for calculating the TJM is as follows:
(Target monthly remuneration before taxes + operating expenses)
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Number of days worked per month
You will get your Raw TJM. In order to know your TJM net, deduct the amount of your taxes and contributions. These can vary greatly between a legal status and another one.
On average, a self-employed person in EURL generally pays 45% social security contributions while a self-employed person in SASU, 80%.
Example of calculating the TJM:
Example in Sasu:
Let's say you have 10 years of experience as a web development consultant, you are a freelancer and your location is Paris. You are aiming for a net monthly income of 4000€.
Monthly costs:
- Social charges: 3200€
- Health insurance: €80
- Various expenses (internet, telephone, meals, travel, etc.): €200
- Retirement insurance: €40
Total monthly costs: €5620
Desired monthly income (net) : 4000€
Number of days worked per month : 20 days (about 4 working weeks)
TJM = (4000€ + 3520€)/20 days
TJM = 7520€/20 days
TJM = 376€ per day
So in order to reach a net monthly income of 4000€ as an independent consultant, taking into account operating costs, mutual insurance, social security contributions, various expenses and pension insurance, you should charge around 376€ per working day.
It is essential to Calculate your daily rate to cover these costs and meet your net income goal
Find out how to define your TJM according to specific positions:
