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//// Business · Freelance Finance

Freelance Overhead Calculator

Most freelancers don't know their overhead rate — which means they're pricing it wrong. Enter your software, equipment, and professional costs to see exactly what your business costs per billable hour and your true rate floor.

Where this fits

💸 Budgeting & Cash FlowGoing 1099Cash FlowFreelancersFounders

This tool lives inside Going 1099 + Cash Flow and is most useful for freelancers and founders.

Corp Tax Rate21%
SE Threshold$400
FICA Cap 2024$168,600

Software & Equipment

Figma, Adobe CC, Notion, Slack, etc.

$/yr

Laptop + monitor + peripherals

$
yrs
Equipment Amortization

Calculated automatically

$1,000/yr

Professional Costs

Courses, books, conferences

$/yr

Bookkeeping + tax prep

$/yr

Contracts, LLC fees, attorney

$/yr

Operations

Website hosting, ads, portfolio

$/yr
$/yr
$/yr
$/yr
$/yr

Your Goals

$

Hours you actually bill clients, not total work hours

hrs/yr

Federal + state + self-employment combined

%
Total Annual Overhead
$7,620
$635/mo
Monthly Overhead
$635
Before paying yourself
Overhead / Billable Hour
$6/hr
6.3% of total revenue
Rate Floor
$102/hr
Minimum to cover all costs

Overhead Breakdown

Software
$1,800 · 24%
Equipment (amort.)
$1,000 · 13%
Prof. Development
$1,200 · 16%
Prof. Services
$2,000 · 26%
Marketing
$600 · 8%
Operations
$1,020 · 13%
Total$7,620/yr

Rate Floor Breakdown

Your rate must cover three things every billable hour:

Overhead costbusiness running costs
+$6/hr
Your salary$80,000/yr ÷ 1200 hrs
+$67/hr
Taxes30% effective rate
+$29/hr
Rate Floor$102/hr minimum
1

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.

2

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.

3

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.

4

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.

5

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.

Key insight

Running your freelance business costs $6/hr before you pay yourself. Your rate floor is $102/hr — below that you're losing money.

Use this result in →

Break-Even Calculator →Client LTV →Profit Margin →

#ShowYourWork

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