Freelance Project Profit Calculator
What a project really pays once every hour and every cost is counted.
A project fee looks generous until the hours are added up. Meetings, revisions, admin and the time spent winning the work are all part of the job, and they can halve the effective rate.
Enter the fee, the hours the project actually takes and what it costs you to deliver, and this calculator gives the profit, the effective hourly rate and the fee that would make it worth doing.
At a glance
- What you enter
- Project fee, Hours you estimated, Hours of revisions and changes, Hours of admin, calls and reporting, Hours spent winning the project, Direct costs, Rate you want to earn per hour, Overheads to allocate to this project
- What you get
- Effective hourly rate, Project profit, Profit margin, Fee needed for the target rate, Fee gap
- Formula shown
- Yes - every step, right below your results.
- Cost and privacy
- Free, no account needed, and nothing you type is stored.
See worked examples ↓ Read the FAQ ↓ Share this calculator ↓
Results are estimates for general information only - always verify with a professional or official source before acting on them.
How to use the Freelance Project Profit Calculator
- 1 Enter Project fee
- 2 Enter Hours you estimated (hours)
- 3 Enter Hours of revisions and changes (hours)
- 4 Enter Hours of admin, calls and reporting (hours)
- 5 Enter Hours spent winning the project (hours) - Proposals, calls and follow-ups before the contract.
- 6 Enter Direct costs - Subcontractors, materials, licences, travel, software bought for the project.
- 7 Enter Rate you want to earn per hour
- 8 Enter Overheads to allocate to this project - A share of your monthly software, insurance, accounting and workspace.
- 9 Press Calculate. You get Effective hourly rate, Project profit, Profit margin, Fee needed for the target rate, Fee gap, and every intermediate step stays visible under “How is this calculated?”
- 10 Change one number at a time to see what moves the result - that is usually the most useful thing a calculator can tell you.
Worked examples
Real numbers run through this calculator. Open any example to load it into the form above and change it.
A $6,000 project that overruns on revisions
40 estimated hours with 15 hours of revisions, 5 of admin and 6 of pitching.
You enter
- Project fee
- $6,000.00
- Hours you estimated
- 40 hours
- Hours of revisions and changes
- 15 hours
- Hours of admin, calls and reporting
- 5 hours
- Hours spent winning the project
- 6 hours
- Direct costs
- $500.00
- Rate you want to earn per hour
- $80.00
- Overheads to allocate to this project
- $400.00
You get
- Effective hourly rate
- $90.91
- Project profit
- -$180.00
- Profit margin
- -3.0%
- Fee needed for the target rate
- $6,180.00
- Fee gap
- $180.00
The project takes 66.00 hours in total, so the $6,000.00 fee works out at $90.91 an hour rather than the $150.00 the quote implied, a drop of $59.09. The hours are worth $5,280.00 at the $80.00 target rate, so after $500.00 of direct costs and $400.00 of overheads the profit is minus $180.00, a margin of -3.0%. A fee of $6,180.00 would have covered the target rate, and the 26.00 hours beyond the estimate are 65.0% more than the estimate itself.
A $3,200 project with a tight scope
24 estimated hours with 4 hours of revisions, 3 of admin and 2 of pitching, at a $60 target rate.
You enter
- Project fee
- $3,200.00
- Hours you estimated
- 24 hours
- Hours of revisions and changes
- 4 hours
- Hours of admin, calls and reporting
- 3 hours
- Hours spent winning the project
- 2 hours
- Direct costs
- $120.00
- Rate you want to earn per hour
- $60.00
- Overheads to allocate to this project
- $200.00
You get
- Effective hourly rate
- $96.97
- Project profit
- $900.00
- Profit margin
- 28.1%
- Fee needed for the target rate
- $2,300.00
- Fee gap
- -$900.00
The 33.00 hours bring the $3,200.00 fee down to $96.97 an hour from the $133.33 the quote implied. At the $60.00 target rate the hours are worth $1,980.00, so after $120.00 of direct costs and $200.00 of overheads the profit is $900.00, a margin of 28.1%. The fee needed for the target rate was $2,300.00, so this project clears it by $900.00 even though the 9.00 hours of overrun are 37.5% of the estimate.
Guides that go with it
How Much Should You Charge as a Freelancer?
Most freelancers set their rate by guessing, then wonder why the month never quite adds up. By the end of this guide you will be able to build a defensible hourly rate from your real costs and income…
How Much of Your Salary Should Go to Rent?
You can work out a defensible rent ceiling in about fifteen minutes with nothing more than your payslip and a calculator. By the end of this guide you will know your gross and take-home pay, the rent…
How Much Does It Cost to Drive 100 Miles?
A hundred miles is a nice round trip to price out: one weekend outing, one leg of a longer journey, one week of commuting. By the end of this guide you will be able to work out your own cost for that…
Frequently asked questions
Why is my effective rate lower than the rate in the quote?
Because the quote only covers the hours you estimated. The effective rate divides the fee by every hour the project takes: the estimate, the revisions, the admin and calls, and the time spent winning the work. In the first example a $6,000 fee over 40 estimated hours is $150 an hour, but across 66 real hours it is $90.91.
That gap is not a bad estimate; it is the cost of everything the estimate did not include. Counting those hours is the only way to price the next project so that they are paid for rather than donated.
Should the hours spent winning the work be charged to this project?
Only the share that belongs to it. If you send five proposals and win one, the sales hours of the other four belong to your overheads while the hours spent on the one you won belong to the project. Either way they consume time that has to be paid for, which is why the field is here.
Leave them out and a project looks more profitable than it is, and you keep doing unpaid pitching without noticing what it costs. Track the pitching hours for a few months and the true cost of winning work becomes visible.
How is the fee needed for the target rate calculated?
Every hour the project takes multiplied by the rate you want to earn, plus the direct costs and the share of overheads allocated to it. In the first example 66 hours at $80 is $5,280, plus $500 of direct costs and $400 of overheads, which gives a fee of $6,180 against the $6,000 quoted, a gap of $180.
Quoting that fee only works if the client will pay it. The number is just as useful in the other direction, because it shows which projects are worth doing at all and which should be declined or rescoped before any work starts.
Why do revision rounds cause so much damage?
Because they are unbounded. Every other part of a project has a natural limit, but revisions continue until someone decides they stop, and each round consumes hours the fee does not cover. In the first example 15 hours of revisions are 65.0% of the estimated hours and take the effective rate from $150.00 down to $90.91.
The remedy is contractual rather than arithmetic: a stated number of rounds, a clear definition of what counts as a revision, and an hourly rate for anything beyond it. Checking the rate before quoting in the Hourly Rate Calculator is a useful habit.