Estimate annual freelance income.
Annual freelance income is rate times billable hours times working weeks — but only the invoices that get paid count, and only 46 or so weeks of the year are usually working weeks once holidays and quiet periods are removed. Dividing collected revenue by 12 months and by all 52 calendar weeks gives the averages that matter for household budgeting, which are lower than a working-week figure suggests.
Annual freelance income
Collected income = hourly rate x billable hours per week x working weeks x (1 - unpaid percent/100)
Holidays, illness and gaps between contracts remove several weeks from every year. Annualising at 52 weeks is the most common way freelance income projections end up too optimistic.
Yes — a small allowance keeps projections realistic. Even well-run practices write off a percentage of billings each year.
Yes. It is revenue collected before business expenses, self-employment tax and income tax are taken out.