Are you actually
profitable?
Revenue minus expenses isn't the full picture. This calculator shows your real net margin — after accounting for your time, overhead, and every project cost. Know your numbers before you price your next project.
Know your costs and target margin? Calculate exactly what you need to charge to hit it — using the correct margin formula, not markup.
Margin formula: Revenue = Costs ÷ (1 − Margin%)
Markup formula: Revenue = Costs × (1 + Markup%)
30% margin on $3,000 costs → $4,286 (not $3,900)
Typical net profit margins by freelance role — after all costs including time value and overhead. Use as a reference, not a ceiling.
| Role | Target gross margin | Target net margin | Health check |
|---|---|---|---|
| Business / Management Consultant | 80–90% | 40–65% | High margin |
| AI / ML Engineer | 80–90% | 40–60% | High margin |
| DevOps / Cloud Engineer | 78–88% | 35–55% | High margin |
| Backend Developer | 75–88% | 30–50% | Healthy |
| Full Stack Web Developer | 75–87% | 28–48% | Healthy |
| Data Analyst / Scientist | 75–86% | 30–50% | Healthy |
| SEO Specialist | 75–88% | 30–50% | Healthy |
| UI/UX Designer | 72–85% | 28–45% | Healthy |
| Copywriter / Content Writer | 72–86% | 28–45% | Healthy |
| Frontend Developer | 73–85% | 25–45% | Healthy |
| Digital Marketer | 70–84% | 25–42% | Moderate |
| Graphic Designer | 68–82% | 22–40% | Moderate |
| Social Media Manager | 65–80% | 18–35% | Moderate |
| Video Editor | 60–78% | 18–35% | Moderate |
| Virtual Assistant | 60–75% | 12–28% | Thin — watch costs |
| Translator / Interpreter | 65–80% | 20–38% | Moderate |
Net margin figures assume time is costed at a realistic floor rate, overhead is allocated per project, and no subcontractors are involved. Projects using subcontractors will have lower gross margins but can still achieve strong net margins with good markup strategy.
Gross margin vs net margin — the distinction that matters
Most freelancers track one number: revenue minus cash expenses. That's gross margin — and it's useful, but it dramatically overstates profitability because it ignores your most significant cost: your own time.
A $5,000 project with $300 in direct expenses looks like it has a 94% gross margin. But if you spent 60 hours on it and your floor rate is $75/hr, your real time cost is $4,500. Net margin: ($5,000 − $4,500 − $300) ÷ $5,000 = 4%. You worked a week and a half for almost nothing.
What counts as overhead?
Overhead is the fixed cost of running your business that isn't tied to any specific project: software subscriptions, professional insurance, accounting fees, home office costs, equipment depreciation, and professional memberships. To allocate it per project, divide your total monthly overhead by the number of projects you typically run that month.
The markup vs margin confusion — and why it costs you
Goal: 25% profit margin on $4,000 of costs
Wrong: $4,000 × 1.25 = $5,000 → actual margin = 20%
Correct: $4,000 ÷ 0.75 = $5,333 → actual margin = 25%
If you tell a client "I add 25% margin to my costs" and use the markup formula instead of the margin formula, you're undercharging by 6.7% every time. On a $100,000/year revenue, that's $6,700 left on the table annually.