freelance project profitability calculator
Are your projects actually profitable? Stop guessing based on your invoice total. Enter your revenue, time spent, and costs to reveal your true take-home pay and effective hourly rate after taxes and overhead.
project profitability
- Total revenue
- $1,500
- Total costs (expenses + overhead)
- -$50
- Estimated taxes (25%)
- -$362.5
- Net profit (take-home)
- $1,087.5
- Effective hourly rate
- $77.68/hr
- Profit margin
- 72.5%
Your $1,500 project fee across 14 total hours yields an effective rate of $77.68/hr and a 72.5% net margin ($1,087.5 take-home after costs & taxes).
Made with 💛 by TheMinCave.
Effective hourly rate lower than expected? Recalculate your baseline rates with the freelance writing rate calculator →
This Project Profitability Calculator provides estimates only and does not constitute financial, tax or legal advice. By using this tool, you agree that you are solely responsible for your business and pricing decisions, and the creators are not liable for any outcomes resulting from its use.
FAQs on calculating freelance project profitability
What is an effective hourly rate?
Your effective hourly rate is the amount of money you actually make per hour of work, after deducting all expenses, overhead, and taxes, and factoring in ALL hours worked (including non-billable time like revisions). It is the most honest metric of whether a project was worth your time.
Why should I include non-billable hours?
If you quote a $500 project that takes 5 hours to write, your rate seems like $100/hr. But if you also spend 2 hours on client calls, 1 hour on invoicing, and 2 hours on revisions, you actually spent 10 hours. Your effective rate drops to $50/hr even before taxes. Including non-billable time gives you a realistic view of your profitability.
How do I calculate overhead allocation?
Overhead covers expenses not tied to a specific project (like your internet bill, software subscriptions, or accounting fees). A simple way to allocate this is to divide your total monthly business overhead by your average monthly billable hours, then multiply that by the estimated hours for this project.
