Project Profitability Calculator
Post-project review: was the engagement profitable, break-even, or a loss versus your target hourly rate? Tracks revenue, hours, and direct costs.
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A project profitability check is the post-mortem on a freelance engagement: revenue collected, hours actually spent, direct costs, and how the resulting effective hourly rate compares to your target. Run it on every engagement and the patterns become obvious — which client types pay well, which scope shapes blow up, which pricing models reliably exceed target.
Examples
Profitable: clean fixed-fee with senior pricing
Break-even: typical hourly engagement
Loss: fixed-fee that ran long
Frequently Asked Questions
Where do I get the target hourly rate from?
Is a 5% margin really break-even?
Should I include my own time in 'subcontractor costs'?
My calculator says break-even but I felt the project was great. Why?
Quick Tips
Double check your inputs. Ensure units match (e.g., inches vs cm).
A project profitability check is the post-mortem on a freelance engagement: revenue collected, hours actually spent, direct costs, and how the resulting effective hourly rate compares to your target. Run it on every engagement and the patterns become obvious — which client types pay well, which scope shapes blow up, which pricing models reliably exceed target.
How to Use This Calculator
Enter the project price (total revenue), every hour you spent on the engagement (billable + non-billable: scoping, calls, revisions, admin), direct costs (software, travel) and any pay-through to subcontractors, and your target hourly rate from the Day Rate calculator. The result tells you whether the engagement was profitable, break-even, or a loss relative to your target — and by how much.
Understanding the Formula
Net revenue = project price − (direct costs + subcontractor costs). Effective rate = net revenue / total hours. Target net revenue = target rate × total hours. Profit / loss = net revenue − target net revenue. Outcome is "profitable" above +5% of target, "loss" below −5%, "break-even" within ±5%.
Examples
Profitable: clean fixed-fee with senior pricing
Project price $15,000, 80 hours total, $300 direct costs, target $150/hr. Net revenue $14,700. Effective rate $183.75/hr → +$2,700 above the $12,000 target = 22.5% above. Profitable.
Break-even: typical hourly engagement
Project price $12,000 (80 hrs × $150/hr), 100 hours total (20 non-billable). Net $11,800 after $200 expenses. Effective rate $118/hr. Target $150/hr × 100 hrs = $15,000. Profit −$3,200 (−21%). Loss vs target — you needed to bill or quote more, given how scoping and revisions consumed time.
Loss: fixed-fee that ran long
Quoted $20,000 fixed-fee. Actually took 200 hours after 4 rounds of revisions. $1,000 direct costs. Target $150/hr. Net $19,000 / 200 hrs = $95/hr — well below target. Loss of $11,000 vs target. Lessons: tighter revisions cap, scope creep contract clauses, mid-project re-quoting.
Frequently Asked Questions
Where do I get the target hourly rate from?
From the Day Rate / Hourly Rate calculator. Plug in your desired take-home, tax, expenses, and time-off assumptions; the hourly-rate output is your target. If you do not have one, use $150/hr as a placeholder for moderate-experience generalist freelance work and update it.
Is a 5% margin really break-even?
Yes — within measurement noise. Hours are estimates, costs have rounding, and the target rate itself has assumptions baked in. Treating ±5% as break-even avoids over-reacting to single projects when the input precision doesn't justify it. Watch the trend across 5+ projects, not a single result.
Should I include my own time in 'subcontractor costs'?
No. Your time is captured by the hours input and priced via the target hourly rate. Subcontractor costs are money you paid OTHER people that flowed through your invoice. Including your own time double-counts it and makes every project look like a loss.
My calculator says break-even but I felt the project was great. Why?
Likely one of: your target rate is too high, you under-counted billable hours, or the project produced non-financial value (a portfolio piece, a referral source, learning a new skill) that the math does not capture. Track those separately — they are real but not on this calculator.
Assumptions & Limitations
- Total hours include all time spent on the engagement, not only invoiced time. Sales calls, scoping, revisions, support, and admin hours all matter — under-counting them is the #1 reason freelancers think low-margin projects are profitable.
- Direct costs are project-specific only. General overhead (your subscriptions, accountant, insurance) is allocated via your target hourly rate, not double-counted here.
- No tax modelling. The output is pre-tax effective rate; multiply by (1 − effective tax rate) for after-tax.
- No opportunity cost. A break-even project that prevented you taking a 50%-above-target one is in reality a loss; this calculator does not model that.