How our calculators work

Every PriceAndProfit calculator is an open formula with test cases. There are no hidden assumptions: the numbers come from what you enter, and the formula is printed under every result so you can check it by hand.

Formulas

1. Gross margin

   Margin = (price − cost) ÷ price. Working backwards: price = cost ÷ (1 − margin).

2. Markup

   Markup = (price − cost) ÷ cost, so price = cost × (1 + markup). Converting: margin = markup ÷ (1 + markup), markup = margin ÷ (1 − margin).

3. Break-even

   Break-even units = fixed costs ÷ (price − variable cost per unit), rounded up to a whole unit; break-even revenue = fixed costs ÷ contribution margin ratio.

4. Freelance rate

   Hourly rate = (income goal ÷ (1 − your tax rate) + business expenses) ÷ billable hours a year, rounded up to a whole dollar.

Your numbers, not ours

The calculators do not contain industry averages, typical margins or tax rates. Costs, prices, expenses and the tax rate are your inputs. Where a figure is needed that we cannot know — your effective tax rate, how many hours you can really bill — the calculator asks for it instead of guessing. Worked examples in the guides use round, made-up numbers to show the math; they are not benchmarks.

Rounding

Each output states its precision: percentages generally show one or two decimals and dollar amounts show cents. Undefined ratios and non-depleting cash are labeled explicitly. Fee-inclusive and fixed-project quotes round up to cents, and their displayed fee or profit amounts use that usable price. Break-even units are rounded up, because selling 499.5 units is not possible and 499 units still lose money. The freelance hourly rate is rounded up to a whole dollar and the day and project equivalents are calculated from that rounded rate. Calculations inside a formula are not rounded in between.

Testing

Each calculator has test cases with answers worked out by hand in advance. Before publishing and after every change to a formula, those cases are recalculated automatically; a calculator with a mismatch is not published. Formulas are versioned, so every change can be traced.

Cost boundaries and additional models

Results are estimates for planning. Each tool includes only the inputs and assumptions it names. The expanded tools cover user-entered fees, shipping, staffing, project costs and cash timing; they do not infer demand, tax obligations or market prices. Contribution is not net profit, and cash receipts are not automatically revenue. Estimates for planning; not tax, legal or financial advice.