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Freelance Profit Calculator

See your gross profit, net profit after tax, profit margin, and effective hourly rate.

Your Annual Numbers

Software, equipment, marketing, contractors, etc.

Federal + state + self-employment tax estimate

Used to calculate your effective hourly rate. Leave 0 to skip.

Your Results

Annual revenue $80,000
Total expenses $15,000
Gross profit $65,000
Estimated taxes $16,250
Net profit (after tax) $48,750
Gross margin 81.3%
Net margin 60.9%
Effective hourly rate $40.63/hr
Monthly net profit $4,063

Revenue breakdown

Net profit
61%
Taxes
20%
Expenses
19%

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What's the Difference Between Gross and Net Profit?

Gross profit is what's left after subtracting your business expenses from revenue. It tells you whether your core freelance work is profitable.

Net profit is what you actually keep after taxes. For freelancers, the effective tax rate includes federal income tax, state income tax, and self-employment tax (15.3% on up to ~$168,600 in 2025). Your net profit margin tells you what percentage of every dollar earned ends up in your pocket.

Frequently Asked Questions

Most freelancers target a gross margin above 70%. After taxes (self-employment + income), a net margin of 50–65% is generally considered healthy. If you're below 50%, look at reducing overhead expenses or increasing your rates.
For US freelancers, a safe starting estimate is 25–35%. This includes ~15% self-employment tax, federal income tax (10–37% bracket), and state income tax (0–13%). Use a lower rate if you have significant deductions or a higher rate if you're in a high-income bracket.
Three levers: (1) Raise your rates — even a 10% rate increase on the same hours has an outsized profit impact. (2) Reduce expenses — audit subscriptions and tools annually. (3) Maximize deductions — every legitimate deduction reduces your taxable income, directly increasing what you keep.
All tools Tax Deduction Estimator → Rate Calculator →