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Freelance Profit Margin Calculator

Understand what remains after direct expenses and overhead. Gross and operating profit answer different questions; this simple model excludes interest and income tax.

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How to use freelance profit margin calculator

  1. Enter the amount earned for a project.
  2. Subtract direct client delivery costs.
  3. Include allocated overhead and other operating costs.
  4. Review contribution, operating profit and percentages.

Example

On $2,000 revenue, $500 direct costs and $300 overhead, gross profit is $1,500 and operating profit is $1,200 (60% margin).

How the calculation or document works

Gross = revenue − direct cost. Operating = gross − overhead − other cost. Operating margin = operating ÷ revenue × 100%. Markup = gross ÷ direct cost × 100%.

Frequently asked questions

Can margin be negative?

Yes. Costs can exceed revenue.

How is margin different from markup?

Margin is measured against revenue; markup is measured against cost.

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