Calculate your freelance gross and net profit margin to understand how much of your revenue you actually keep.
Invoicing, Tax & Tools
Bill clients, track time, and file taxes — software built for the self-employed
Profit margin is the clearest measure of how financially healthy your freelance business is. Revenue tells you how busy you are; profit margin tells you if the business is actually working.
For freelancers, gross profit margin is calculated by subtracting direct project costs (subcontractors, project-specific tools, client expenses you cover) from revenue. Net profit margin deducts all remaining overhead — software subscriptions, insurance, accounting, marketing, and equipment.
A healthy solo freelancer with minimal overhead can achieve 50-70% net margins. Those who regularly subcontract work or have significant fixed costs should target 30-45%. Below 20% is a warning sign: either expenses are too high, rates are too low, or both.
The fastest way to improve your margin is to raise rates — a 10% increase in your hourly rate with the same volume of work goes entirely to profit, assuming your costs are fixed. The second fastest: eliminate or renegotiate subscriptions and services you're no longer getting full value from.
Profit Margin
The percentage of revenue that remains as profit after deducting all business expenses — a core measure of freelance business health.
Overhead
The fixed business costs a freelancer incurs regardless of how much client work they do — rent, software, insurance, and other ongoing expenses.
Break-even Point
The minimum revenue or billable hours a freelancer must achieve to cover all business costs without profit or loss.
Net margins above 40% are healthy for service businesses with low overhead. Margins below 20% are concerning. Pure solo freelancers with minimal costs often achieve 50-70% net margins. Those who rely on subcontractors or have high overhead will see lower margins.
Gross margin deducts only direct costs (subcontractors, project-specific expenses). Net margin deducts all costs including fixed overhead. Gross margin tells you if your pricing is right for the work delivered. Net margin tells you if the whole business is profitable.
Raise rates (fastest impact), reduce or eliminate subcontractor use on thin-margin work, audit and cut unused subscriptions, and productize services to reduce scope creep. A 10% rate increase with no other changes goes straight to profit.
Yes. Monthly tracking helps you spot trends early — a declining margin often signals rate stagnation, increased expenses, or taking on less profitable clients. Compare month-over-month and year-over-year.
Hourly Rate Calculator
Calculate your optimal freelance hourly rate based on your income goal, billable hours, overhead costs, and desired profit margin.
Billable Hours Calculator
Calculate how many billable hours per week you need to hit your income target after accounting for vacation, sick days, and admin time.
Break-even Calculator
Calculate the minimum billable hours or revenue needed each month to cover all your freelance business costs.