Freelance Break Even Calculator

Price your services using real costs and time. Account for admin work, holidays, and fees. Know your minimum rate before accepting any client offer.

Calculator inputs

Enter realistic costs and working capacity for a reliable rate.

Use $, €, £, Rs, etc.
Rent, food, transport, insurance.
Tools, internet, coworking, ads.
Licenses, equipment, renewals.
Income after covering expenses.
Use your effective average rate.
Emergency fund and long-term goals.
Total hours available, not only billable.
Exclude vacations, public holidays, illness buffer.
Percent of work time you can invoice.
Marketplace commission, agency cut.
Card and transfer processing charges.
Contractors, materials, travel per project.
Used to estimate projects needed monthly.
Used to suggest a project price.
Adds a volatility cushion to break-even.
Reset

Example data

Use this sample to sanity-check your inputs before quoting clients.

Scenario Personal/Month Business/Month Utilization Work Hours/Week Tax Fees+Variable Break-even Hourly
Starter $1,200 $200 60% 35 12% 6% $37.10
Growth $1,800 $450 65% 40 15% 8% $55.90
Premium $2,500 $700 70% 45 20% 10% $86.40

Numbers are illustrative. Your result changes with weeks worked, utilization, and fees.

Formula used

1) Annual billable hours
AnnualWorkHours = HoursPerWeek × WeeksPerYear
AnnualBillableHours = AnnualWorkHours × (Utilization ÷ 100)
2) Fixed costs and buffer
AnnualFixedCosts = (PersonalMonthly + BusinessMonthly) × 12 + AnnualBusiness
BufferAmount = (PersonalMonthly + BusinessMonthly) × BufferMonths
3) Revenue requirement
Retention = 1 − ((Tax% + Savings%) ÷ 100)
TakeRate = 1 − ((Platform% + Payment% + Variable%) ÷ 100)
GrossRevenueNeeded = ((AnnualFixedCosts + BufferAmount + TargetTakeHomeAnnual) ÷ Retention) ÷ TakeRate
4) Break-even pricing
BreakEvenHourly = GrossRevenueNeeded ÷ AnnualBillableHours
BreakEvenDaily = BreakEvenHourly × 8
MonthlyRevenueNeeded = GrossRevenueNeeded ÷ 12

This model focuses on practical quoting: costs + goals adjusted for taxes, savings, and common fee leakage.

How to use this calculator

  1. Enter expenses: Add your personal and business monthly costs, plus annual renewals.
  2. Set goals: Choose your monthly take-home target, savings, and tax rate.
  3. Define capacity: Set weekly hours, weeks worked, and billable utilization.
  4. Add leakage: Include platform, payment, and variable cost percentages.
  5. Calculate and quote: Use break-even hourly, daily, and project price to set minimum offers.

Planning inputs that change your break-even fastest

This calculator translates your lifestyle costs and work capacity into a minimum rate. It assumes you pay expenses, protect cash with savings, and absorb fee deductions. Because inputs are transparent, you can test scenarios like fewer working weeks, higher software overhead, or changing tax assumptions before you publish rates or negotiate retainers with confidence today.

Billable utilization sets your real earning capacity

A common planning range is 50%–75% billable time. At 40 hours weekly and 48 weeks yearly, total capacity is 1,920 hours. With 60% utilization, billable hours drop to 1,152, so your minimum rate rises because the same annual costs must be recovered in fewer invoiceable hours.

Fixed costs define the floor before profit

Monthly personal and business expenses are treated as fixed commitments. If combined expenses are $2,200 per month, the baseline annual fixed cost is $26,400, plus any annual renewals. Adding a one‑month buffer increases resilience by another $2,200, which is especially useful when invoices are paid late.

Taxes and savings shape how much revenue you must keep

This model uses a retention factor: 1 − (tax% + savings%). If tax is 15% and savings is 10%, retention is 75%. That means every $1.00 of take-home and fixed costs requires about $1.33 of revenue before fees, even before considering platform or payment deductions.

Fee leakage can quietly erase strong pricing

Payment processing and platform commissions reduce what you actually receive. For example, 2.9% payment fees plus 5% variable costs yields a 92.1% take rate. If you also pay a 10% platform fee, take rate becomes 82.1%, requiring noticeably higher headline pricing to land the same net outcome.

Project signals convert rates into actionable quoting

When you enter an average project fee, the calculator estimates projects needed monthly to hit revenue targets. If the average project takes 20 billable hours, a break-even hourly rate translates into a suggested minimum project price. Use this as a floor, then add value-based premiums for urgency, expertise, or risk.

Review results quarterly. As your pipeline improves and repeat clients grow, utilization rises, allowing higher take-home at the same rates or competitive pricing with healthier margins.

FAQs

1) What is “break-even” for a freelancer?

It is the minimum pricing needed to cover costs, taxes, savings goals, and fees. At break-even, you meet obligations and targets but do not add extra profit beyond those goals.

2) Why does utilization matter so much?

Only billable hours generate revenue. Lower utilization means fewer invoiceable hours to cover the same annual needs, which increases your required hourly or project rate.

3) Should I include a buffer?

Yes, if your income is uneven or clients pay slowly. A one‑to‑three‑month buffer can stabilize cashflow and reduce pressure to accept underpriced work.

4) How should I choose the tax rate?

Use your effective average rate, not the highest bracket. If you are unsure, start conservatively, then revise quarterly using real totals from invoices and expenses.

5) What if my fees are fixed instead of percentages?

Convert typical fees into a percentage of revenue for planning. Alternatively, add them into monthly or annual costs. The goal is capturing the average leakage you expect.

6) How do I turn the hourly result into a client quote?

Treat the break-even rate as your floor. Then add margins for complexity, scope risk, revisions, and value delivered. For projects, multiply by estimated billable hours and include contingency.

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Important Note: All the Calculators listed in this site are for educational purpose only and we do not guarentee the accuracy of results. Please do consult with other sources as well.