Freelance Overhead Calculator

Equipment Amortization

Amortization = equipment_cost / useful_life_years

$3,000 / 3 yrs

= $1,000/yr

Spreading the equipment cost over its useful life gives you the true annual cost rather than a one-time hit.

Total Annual Overhead

Total = software + equipment_amort + prof_dev + prof_services + marketing + operations

$1,800 + $1,000 + $1,200 + $2,000 + $600 + $1,020

= $7,620/yr ($635/mo)

This is the full cost of running your freelance business before paying yourself a single dollar.

Overhead per Billable Hour

Overhead/hr = total_annual_overhead / annual_billable_hours

$7,620 / 1200 hrs

= $6/hr

Every hour you bill must carry this overhead load. If you charge less than this, you're subsidizing your clients with your own money.

Tax Gross-Up

Gross-up = target_salary / (1 − tax_rate)

$80,000 / (1 − 30%)

= $114,286/yr in pre-tax revenue needed

To take home your target salary after taxes, you need to earn more. This is the gross revenue required just to fund your paycheck.

Rate Floor

Rate floor = (total_overhead + tax_gross_up) / annual_billable_hours

($7,620 + $114,286) / 1200 hrs

= $102/hr minimum

Below this rate you are literally losing money — not covering overhead, not covering your salary, or both. This is your absolute floor, not your target rate.