Freelance & Service Pricing
Essential Calculators
Use these tools to run the numbers for this scenario.
Action Plan Checklist
- Calculate your total monthly business and personal expenses.
- Determine how many billable hours you actually have per week (usually far less than 40).
- Factor in self-employment taxes and income taxes.
- Ensure every quote includes a healthy profit margin above your baseline costs.
Required Reading
Deep dive into the strategies behind this use case.
Profit Margin Explained: Gross vs. Net Margin
Profit margin measures how much out of every dollar of sales a company actually keeps in earnings. It is the clearest indicator of a business's financial health.
Markup vs Margin
Avoid the most common pricing mistake in business by understanding the critical mathematical difference between markup and margin.
Key Terminology
Understand the financial and mathematical terms involved.
Worked Examples
Real-world scenarios with step-by-step calculations.
Calculating Software Agency Margins
The agency keeps 25 cents of pure profit for every dollar it earns in revenue. The remaining 75 cents goes toward paying employees, rent, and software licenses.
View in Calculator →Frequently Asked Questions
Why shouldn't I just charge what competitors charge?
Your competitors might have lower living expenses, different tax brackets, or they might be operating at a loss without realizing it.
What is the difference between markup and margin?
Markup is added to your cost to get the price. Margin is the percentage of the final price that is profit. 100% markup only equals a 50% margin.