Revenue is not profit, and busy is not profitable. A project that pays 5000 can still lose money once you count your time, materials, subcontractors, and a fair share of overhead. Many freelancers only discover this at year end, when the bank balance disagrees with the invoice total. This calculator separates the two numbers for every project: what came in, what went out, and what actually stayed.
Start with every cost, not just the obvious ones. Labour is your time valued at a real rate, or your team pay if others did the work. Materials and subcontractors are direct project costs. Overhead is the share of running costs that belongs to this project: software subscriptions, insurance, admin time, and workspace. Leaving overhead out flatters every project equally, which hides the fact that small projects carry overhead badly and large projects carry it well.
Here is a worked example. Revenue is 5000. Labour costs 2500, materials and subcontractors cost 500, and overhead is 300, so total cost is 3300. Profit is 1700, and the margin is 1700 divided by 5000, which is 34 percent. Over 50 hours, profit per hour is 34. The cost share of revenue is 66 percent. Those five numbers together tell you far more than the revenue figure alone, and they let you compare projects of very different sizes fairly.
Profit per hour is the number that should drive your decisions. Two projects can each make 1700 profit, but if one took 50 hours and the other took 100, the first pays twice as well per hour. When you choose between new work, repeat the profitable kind and reprice or refuse the kind that eats hours. Over a year, shifting even ten percent of your time from low profit-per-hour work to high profit-per-hour work raises your income without working a single extra hour.
Margin tells a different story from profit per hour, and you need both. Margin shows how much of each payment you keep after costs, which matters for pricing and for surviving a bad month. A project with a high margin but few hours is safe but small; a project with a low margin and many hours is large but fragile, because one cost overrun wipes it out. Aim for work that is healthy on both measures, and be suspicious of work that is healthy on only one.
Break-even hours answer a practical question: how many hours can this project absorb before it stops paying? Divide total cost by your effective hourly rate to find the point where revenue equals cost. If the project is already past break-even hours and still unfinished, every extra hour needs either a scope cut or an extra fee. Knowing the break-even point early lets you raise the problem with the client while there is still time to fix it, instead of at the final invoice.
Common mistakes distort the picture in predictable ways. Valuing your own time at zero makes every project look profitable and hides the real cost of your labour. Forgetting subcontractor fees until they arrive makes mid-project numbers look better than the final ones. Counting revenue before the client pays makes an unpaid invoice look like profit. Record costs as they happen, value your time honestly, and count revenue when it is paid, and the calculator will tell you the truth.
Use this tool at the end of every project, while the numbers are fresh. Log profit, margin, and profit per hour next to the project name, and review the list each quarter. Patterns appear quickly: a type of client, a kind of task, or a price level that consistently underperforms. That list becomes your pricing guide for the next year, built from your own work rather than from advice. Profitability is not a year-end surprise; it is a per-project habit, and this calculator makes the habit take two minutes.