Example Data Table
This sample budget shows how costs can be organized before running the calculator.
| Category | Type | Amount | Notes |
|---|---|---|---|
| Software subscriptions | Fixed | $220.00 | Design tools, email, storage |
| Insurance | Fixed | $140.00 | Professional liability |
| Internet + phone | Fixed | $90.00 | Connectivity expenses |
| Payment processing fees | Variable | 3.50% | Percent of billed revenue |
| Contractor support | Variable | $80.00 | Per project |
Formula Used
- Loss factor = 1 − (unpaid/discount rate)
- Pre-tax profit target = net profit ÷ (1 − tax rate)
- Percent variable cost model
Effective margin = loss factor − variable rate
Required billed revenue = (fixed expenses + pre-tax profit target) ÷ effective margin - Per-project cost model
Contribution per project = (project fee × loss factor) − variable cost per project
Projects needed = (fixed expenses + pre-tax profit target) ÷ contribution per project - Rate needed at capacity = required billed revenue ÷ (capacity hours × utilization)
How to Use This Calculator
- Enter your monthly fixed expenses and choose a variable cost model.
- Add an unpaid/discount rate if invoices are not fully collected.
- Set a net profit goal and a tax rate to translate it.
- Enter capacity and utilization to see workload feasibility.
- Click Calculate and review revenue, projects, and hours.
- Use CSV or PDF downloads to share or archive results.
Break-even thinking for freelancers
Break-even is the point where your collected income covers monthly operating costs, so the business stops subsidizing itself. This calculator separates billed revenue from collected revenue by applying an unpaid or discount rate, which mirrors real freelance cash flow. It then adds your net profit goal, converts it to a pre‑tax target, and applies a safety buffer so pricing remains stable during slower weeks, late payments, and unexpected scope changes.
Mapping fixed and variable costs
Start with a complete cost map. Fixed expenses are monthly items such as software, coworking, hardware financing, insurance, and internet. Variable costs scale with work: payment fees as a percentage, or per‑project items like travel, materials, or subcontractors. Use the percent model when costs move with revenue, and the per‑project model when each job has a predictable cash outlay. Accurate inputs prevent underbidding. Review statements monthly to validate estimates regularly.
Interpreting the revenue targets
The output provides two key targets: break-even billed revenue and required billed revenue. Break-even covers fixed and variable costs after adjusting for collection losses. Required revenue adds your profit goal and the chosen buffer. Compare “collected revenue” with “variable costs” to see the implied contribution margin. If the margin is near zero, lower variable cost assumptions, reduce discounts, or reprice packages before taking on more volume to protect your time.
Turning targets into rates and workload
Use the workload view to translate revenue into effort. Capacity hours reflect available work time, while utilization represents the portion you can actually bill after sales, admin, and learning. Effective billable hours equal capacity multiplied by utilization. The calculator shows hours needed at your current rate, plus the hourly rate required if you want to hit targets within capacity. This is where pricing, scope, and scheduling decisions become measurable in a month.
Using exports for consistent planning
Planning improves when you store a record of assumptions. Use the CSV export for spreadsheets, trend tracking, and comparing multiple service lines, and use the PDF export when sharing targets with a partner or accountant. The built-in scenarios highlight sensitivity: a 10% increase in fixed costs or a 10‑point utilization drop can push required rates up quickly. Recalculate after major purchases, rate changes, or new client terms each quarter minimum.
FAQs
What’s the difference between billed and collected revenue?
Billed revenue is what you invoice. Collected revenue is what you expect to actually receive after discounts, write‑offs, refunds, or late nonpayment. The unpaid/discount rate converts billed revenue into a more realistic cash target.
Which variable cost model should I pick?
Choose percent-of-revenue when costs scale with sales, like payment processing or marketplace fees. Choose per-project when each job has predictable cash outlays, like travel, materials, or a subcontractor budget.
How do I choose a realistic utilization rate?
Start with your recent calendar. Many freelancers land between 50% and 75% billable time once marketing, proposals, meetings, and learning are included. Use a lower value if you are building a pipeline.
What if the calculator says margin is not positive?
That means your collection losses and variable costs consume all revenue. Reduce discounts, lower variable cost assumptions, increase price, or redesign the offering so each project leaves a clear contribution after costs.
Should I enter my full income tax rate here?
Use the approximate rate that applies to profit from your freelance work, not gross revenue. If taxes are complex, enter a conservative estimate and treat the output as a planning target, not a filing calculation.
How often should I update the inputs?
Update whenever expenses, pricing, or client terms change. As a baseline, revisit quarterly and after large purchases, new subscriptions, or a major shift in utilization so your targets stay accurate.