The Get Paid Kit · Pricing

Free margin calculator

Every price has to answer two questions. What margin does this price carry — after your own hours are charged as a cost, not treated as the profit? And what price does the margin you intend actually need? This calculator runs both directions of that one equation. On the defaults, a $1,900 packaged service that costs $1,140 to deliver — ten of your hours at $95, plus $190 of direct costs — keeps $760: a margin of 40.0%. Run it backwards and a 40% target margin on those same costs needs a price of exactly $1,900, because the two modes are the same arithmetic read from opposite ends. This is the quick, two-number version of the question: one line, one price, one costs figure. When the line is a whole project — a payment fee, subcontractor help, a revision buffer, an effective rate to audit — the project profitability calculator runs the full autopsy. Use this page at the moment of pricing; use that one at the moment of reckoning.

Runs in your browser — nothing you enter is uploaded, sent to a server or stored anywhere except this device. The figures exist only in this page. This is a planning estimate for your own numbers, not financial advice.

One line, priced honestly

Margin is profit divided by price; markup is profit divided by cost. They are not two words for one number — on the defaults the same profit is a 40.0% margin and a 66.7% markup, and a price built from the wrong one is wrong by the whole gap.

What this price carries

— margin

Enter a price and its costs, and the reading appears here.

—Profit — what the price keeps after every cost in the helper.
—Markup — the same profit as a share of costs, shown so the two are never confused.
—The price your target margin needs on these costs.
Your hours—
Your time cost (hours × rate)—
Other direct costs—
Helper total (time + direct costs)—
Costs used—
Price—
Profit—
Margin (profit ÷ price)—
Markup (profit ÷ costs)—
Price needed for a 40% margin—
Price at a 25% margin—
Price at a 30% margin—
Price at a 40% margin—
Price at a 50% margin—

Enter a price and its true costs, and this line reads the margin back to you.

Worked example

The numbers pre-filled above are a complete worked example: a packaged service priced at $1,900, delivered in ten hours at a $95 rate with $190 of direct costs. Enter those numbers and the calculator returns exactly this:

Price$1,900.00
Your time cost (10 hours × $95)$950.00
Other direct costs$190.00
Total costs to deliver$1,140.00
Profit ($1,900.00 − $1,140.00)$760.00
Margin ($760.00 ÷ $1,900.00)40.0%
Markup ($760.00 ÷ $1,140.00)66.7%
Price needed for a 40% margin ($1,140.00 ÷ 0.60)$1,900.00
Price at a 25% margin$1,520.00
Price at a 30% margin$1,628.57
Price at a 50% margin$2,280.00

Now the discount trap, on the same numbers. A client asks for 10% off and it sounds like a tenth of the money. The price falls to $1,710.00; the costs do not move; the profit falls from $760.00 to $570.00 — a quarter of it, gone, for a “tenth” off. Discounts are not taken from the price. They are taken from the margin, which is the only part of the price that was ever yours. That is why this page exists, and why our guide to handling a client asking for a discount starts from the margin rather than the headline.

The method

How margin works

  1. Costs must include your hours, at your rate. A service line’s biggest cost is the person delivering it. Leave your hours out — or price them at a made-up rate below the one your time has to earn — and the margin is fiction: the line looks profitable because its main cost was never charged. The helper above exists to make the honest version the easy version. When the shape grows past one line — a subcontractor to manage, a payment fee, revisions that need a buffer — the project profitability calculator charges all of it; this page is its quick front door, not its replacement. And when that line becomes a fixed quote, the project price calculator is where the quote itself gets built — parts, buffer, expenses, the payment fee read both ways and the deposit the quote implies.
  2. Margin is where raises and discounts actually live. A price rise does not add its percentage to your year; it adds to the margin, which is why a modest rise on a thin line can double what the line keeps. A discount does the reverse, out of proportion: 10% off a 40%-margin price costs a quarter of the profit, as the worked example shows. Read every negotiation in margin points before you read it in price points, and trade scope for price before you trade margin for nothing.
  3. Line margin is not business margin. This page reads one line against its own delivery costs. The expense ratio checker reads the whole business — every expense as a share of everything invoiced — and the two numbers answer different questions. A healthy line inside an expensive business still leaks; a lean business can carry one thin line deliberately. Use the line figure to price, and the business figure to steer.
  4. Repricing a line. A thin margin is information, not a verdict: the line can be repriced, rescoped, or rebuilt so its hours shrink. Our guide to value pricing for freelancers covers when the hour stops being the right unit to price from at all, and our guide to testing a higher rate covers raising the price on real clients without betting the practice on it. What never fixes a thin margin is selling more of the line at the same shape. And when one line becomes three — a good, better and best ladder for the same package — the pricing tier builder spreads the base price across the tiers and reads each tier’s margin at the scope it really carries.
Disclaimer: This is a planning estimate for your own numbers, not financial advice. The verdict bands on this page are practice judgements for hands-on service work, labelled as such — not industry data. What you charge is your decision; the calculator does honest arithmetic on the figures you give it.
Questions

Margin calculator questions

Think in margin. Margin is profit as a share of the price — the number that survives contact with discounts, because a discount comes off the price, so it comes straight out of the margin. Markup is profit as a share of costs, useful when you are building a price up from a supplier’s figure. Quote neither: a client sees a price, and the margin behind it is your business. The confusion to avoid is treating the two as interchangeable — on this page’s defaults the same $760 of profit is a 40.0% margin and a 66.7% markup, and a price built with the wrong one is wrong by the whole gap.
As a practice judgement for hands-on service work — not industry data — this page reads 40% and above as healthy for a packaged line, 25–40% as workable and below 25% as thin for anything with delivery risk. The why matters more than the bands: a service line’s costs are mostly your hours, and hours expand — revisions, waiting, the extra call. The margin is the only part of the price built to absorb that expansion, so a line that delivers by hand needs more of it than a line that delivers itself.
Because margin is per line, and your business is not. A 50% margin on work you sell ten hours a month loses to a 30% margin on work you sell a hundred — the share is healthy and the volume is not, which is a utilisation question. And the business’s other costs sit outside any single line’s costs: software, insurance, the unpaid selling hours. The utilisation calculator measures the first gap; the break-even day calculator shows the date the whole year’s costs are covered. Margin tells you a price is sound. It cannot tell you the year is.
Planning

More planning tools

Project Profitability Calculator

The full autopsy this page is the front door to: a whole project’s fee after its payment fee, your hours with a buffer, subcontractor help and expenses — the profit, the margin and the rate it really pays.

Open tool →

Expense Ratio Checker

The business-level version of this reading: your real expenses as a share of invoiced revenue, the gap against the share your rate assumed, and what the gap costs an hour.

Open tool →

Freelance Hourly Rate Calculator

The rate the helper prices your hours at — built from your target income, your costs, your tax estimate and the billable share of your week. If your rate is a guess, every margin built on it is too.

Open tool →