The forgotten costs: a freelance expenses checklist

By the WorkKitly Team · Last updated: November 2026 · 7 min read

Most freelancers build their expenses figure from memory, and memory keeps the software subscriptions and drops almost everything else. The full list runs to eight groups: tools, hardware wearing out on a four-year clock, fees skimmed off card payments, insurance and accounting, selling yourself, training, a fair share of the home you work from, and the admin of staying compliant. Work through it once, total it honestly, and the number goes straight into the expenses field of the freelance hourly rate calculator — that field is only as honest as the list behind it. One framing note before we start: this is a pricing exercise, not tax advice. Whether any item here is deductible depends on your country and your situation. The rate maths does not care — a cost you pay is a cost your rate must carry either way.

The checklist: eight groups of costs

Go group by group; each one names the reason its costs get forgotten — knowing it is what keeps them counted next year.

1. Tools of the trade

Forgotten because each subscription is small and monthly; nobody ever sees the annual total in one place.

• Software subscriptions — the apps the work itself runs on, craft and admin alike.
• Plugins, fonts, stock and assets — the small licences bought per project that never get added up.
• Your own domain and hosting — count them here or under selling yourself, but only once.
• The second tier of tools — the project board, the storage upgrade, the e-signature plan: individually trivial, jointly real.

2. Hardware

Forgotten because it arrives as one large purchase every few years instead of a monthly line — so it feels like an event, not a cost of the years between.

• Computer replacement — the laptop's price divided by the years it will realistically last.
• Phone — if it is also your camera, your client line and your security-key device, its replacement is a work cost too.
• Peripherals and repairs — monitor, keyboard, drives, cables, and the repair you did not plan for.
• Backup storage — an external drive or cloud backup. Cheap every year; the year you need it, priceless.

3. Getting paid

Forgotten because most of it is deducted before money reaches you. You never watch it leave, so you never count it.

• Payment processing fees — the shape of the maths: for every $10,000 that arrives by card at 2.9%, $290 never reaches your account. Scale it to your own card share; it is usually the largest line in this group. It is also why your payment terms — bank transfer where you can, card where you must — quietly change what you keep.
• Accounting and bookkeeping — the accountant's annual fee, or the bookkeeping help you buy at year end.
• Invoicing and accounting software — if you did not already count it under tools of the trade.
• Transfer and conversion fees — what cross-border payments and currency conversion take on the way in.

4. Protection

Forgotten because employment used to carry all of it invisibly, inside a salary you never had to itemise.

• Health insurance — where you buy your own, the full premium is a cost of being self-employed and belongs in the list.
• Professional indemnity and liability cover — where your trade or your clients expect it, and cheap compared with the one claim it exists for.
• Retirement contributions — nobody matches your pension contributions now. Treat what you set aside as a planned cost of self-employment, not as whatever is left over.

5. Selling yourself

Forgotten because it does not feel like a cost of doing the work — it is filed mentally under "career", and careers feel free.

• Portfolio site costs — the premium theme, the portfolio platform plan, the extras beyond the domain and hosting counted earlier.
• Directory and marketplace fees — paid listings, profile boosts and platform charges for being findable.
• Proposal tools — the software your pitches are built and sent with, if it is not already under tools.
• Samples and spec work — this one is paid in time rather than cash, so do not force it into the money total: allow for it in your billable percentage instead, where unpaid pitching hours belong.

6. Skills

Forgotten because training feels like a treat or a luxury. It is neither — it is maintenance on the only asset the business has.

• Courses and structured training — the ones that keep your core skill current, not just interesting.
• Books and reference subscriptions — small, steady, and almost never totalled.
• Certifications and exam fees — including the renewal fees that arrive quietly every year or two.
• Conferences — the ticket plus the travel, annualised if you go every other year.

7. Workspace

Forgotten because the bills arrive anyway, freelancer or not — but the share of them your work uses is a work cost, and your rate is the only place it can come from.

• A fair share of rent and utilities — the portion of the room, heat and electricity your working hours genuinely use. Fair means defensible, not maximal.
• Internet — the full bill if work is why the fast tier exists, a fair share otherwise.
• Coworking — if you pay for a desk, it replaces the home share rather than stacking on top of it.

8. Admin and compliance

Forgotten because it is annual, unglamorous, and small — right up to the year it is none of those things.

• Company filings and registered-agent fees — where your business structure has them.
• Contracts and legal review — templates bought once and a lawyer's hour every year or two, divided by the years between visits.
• Data protection tools — password manager, VPN and secure storage: the unglamorous software standing between your clients' files and the internet.
• Licences and professional memberships — the ones your trade requires you to hold to practise at all.

From a checklist to one annual number

The conversion is mechanical. Monthly costs are multiplied by twelve. Annual bills count as they stand. Hardware is divided by its replacement life — a $1,800 laptop that lasts four years is $450 a year, every year, not $1,800 in one year and nothing in the next three. Irregular costs are divided by the years between them. And each cost is counted exactly once: the groups overlap deliberately — your site fits two of them — so give every cost one home.

Here is the method worked end to end. Jess is a fictional freelance graphic designer; every figure is invented, and the arithmetic is shown so you can check it. Of the $80,000 she invoices in a year, $40,000 arrives by card at 2.9% — the $1,160 fee line below.

Now the total earns its keep. Jess wants to take home $60,000, works 40 hours a week with four weeks off, bills 55% of the hours that remain, and uses a 25% tax estimate and a 10% margin — the calculator's standard settings. Run through the rate calculator, her chain is:

Feel the weight of the forgotten lines: had Jess counted only group 1 — the software — her expenses figure would be $1,560 and the same calculator returns $86 an hour. The $14,820 she nearly left out was quietly costing her $20 on every hour she sells. Nothing about her work changed; only the honesty of one input did. Run your own list through the hourly rate calculator and compare the two versions of your number — the gap is usually the whole point of the exercise.

And the framing, once more before the mistakes: whether any of Jess's $16,380 is tax-deductible is a separate question, depending on her country and her setup — a question for a local accountant. For pricing it changes nothing. The costs leave her account either way, so they sit in her rate either way.

Mistakes that shrink the number

Counting only the software. The subscriptions are the visible tip — in the worked example they were under a tenth of the total. If your expenses figure could be recited from your app settings page, it is not finished.

Leaving out payment fees because they are invisible. Fees are netted off before the money arrives, so no bill lands on your desk. Reconstruct them from your invoicing total and your card share, the way the example does — invisibility is why they are forgotten, not evidence they are small.

Counting costs your clients reimburse. Travel, materials and licences that a client pays back are pass-through money, not overheads: they leave your account and return. Including them inflates the expenses figure and quietly double-charges every other client for them.

Using last year's number forever. Subscriptions creep, premiums rise, a laptop crosses from fine to failing. Rebuild the figure once a year — the same sitting as your annual rate review — or the rate you set in January is funding December's costs at last year's prices.

Questions

Related: the number behind the number

This checklist exists to feed one field: the expenses box in the freelance hourly rate calculator. Build your total here, run the calculator there, and the rate that comes out is the first that has actually met your costs. When that rate sits above what you currently charge, our guide to how to raise your rates covers closing the gap without the apology essay. If your work is tool-heavy, look at a trade's own version of this list: the SEO consultant rate calculator presets a $6,000, tools-led expenses figure, because for that trade group 1 is where the money goes. Every profession's list has a different centre of gravity — this checklist is how you find yours.