The Freelance Profit Estimator calculates profit by subtracting project and business costs from freelance revenue. It also reports profit margin and an optional after-tax reserve amount based on a user-entered reserve rate.
Freelancers can use the estimate to evaluate a project, month, or year, provided revenue and costs cover the same period. It is especially useful when separating direct project costs from recurring overhead before deciding whether pricing is sufficient.
1. Choose a period
Use one project, month, quarter, or year and keep every amount on that basis.
2. Enter revenue
Add the freelance income earned or expected for the selected period.
3. Separate costs
Enter direct delivery costs and general business overhead separately.
4. Set a reserve rate
Optionally enter a percentage of positive profit to reserve for taxes.
5. Review profitability
Check profit, margin, total costs, and the amount left after the reserve.
Where:
The headline is estimated profit before the optional reserve. A negative result means entered costs exceed revenue.
The tax reserve is a planning amount only and does not determine actual tax liability.
Given: Revenue of $7,500, direct costs of $1,400, overhead of $1,100, and a 25% reserve rate.
Calculation: Profit = $7,500 − $1,400 − $1,100 = $5,000. Margin = $5,000 ÷ $7,500 = 66.7%. Reserve = $5,000 × 25% = $1,250.
Result: Estimated profit is $5,000, with $3,750 remaining after the planning reserve.
Choose the basis that matches your purpose and accounting method. For cash planning, collected revenue is usually more relevant.
They are costs caused by a specific engagement, such as subcontractors, project materials, travel, or transaction fees.
Normally no when costs are nonnegative. It can be negative when costs exceed revenue.
A planning reserve is generally unnecessary when the simple estimate shows a loss, although tax treatment may differ.
No. Personal taxes, benefits, retirement contributions, debt payments, and owner draws are not fully modeled.