The day your year starts paying you
Everything you invoice before that date goes to your costs. This works out where the date falls, and what it costs you to move it.
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| Change | Break-even moves to |
|---|---|
| As you entered it | — |
| Rate 10% higher | — |
| Two more billable hours a week | — |
| Fixed costs cut by a fifth | — |
Break-even here is about your business costs, not your living costs. It is the point where the year stops funding the tools and starts funding you — a useful marker precisely because it is early enough to be reachable and late enough to be sobering.
Print the sheet
One page with the date, the hours behind it and the four scenarios. Useful pinned somewhere in January.
Why a date is more useful than a number
You can be told that your costs are 6,000 a year and feel nothing. Being told that you work until the middle of March before you earn anything for yourself is a different sensation, and it makes the same fact actionable. The point of converting costs into a date is that a date can be moved, and you can see it move.
It also reframes a subscription honestly. A tool at 30 a month is 360 a year, which at 60 an hour is six billable hours — call it most of a working day. That is the real question about any recurring cost: does this save me a day of work a year. Some do comfortably; most of the ones people pay for do not.
And it separates two things that get confused. Business break-even is not the point where you can pay your rent — it is the point where the business stops funding itself out of your labour. Your living costs sit on top, which is why this calculator keeps them out: mixing them produces a date so late that it stops being informative.
Fixed costs, delivery costs, and the part people forget
Fixed costs are the ones that arrive whether or not you work: software, insurance, the accountant, the desk, the phone, bank charges, the domain. They are easy to underestimate because they are individually small and monthly. Add them up once a year and the total is usually a surprise.
Delivery costs are the ones that scale with the work: a subcontractor, stock assets, a licence bought for one project, the payment processor's percentage. They matter here because they change what each billable hour contributes. If a fifth of everything you invoice goes straight back out, an hour at 60 is only putting 48 towards your costs, and the break-even date moves later than the naive division suggests.
The part people forget is that unpaid invoices do not count. Break-even measured on invoices sent is a fiction if two of them are ninety days late. It is worth running this calculation twice — once on what you billed and once on what arrived — because the gap between those two dates is the real cost of slow payers.
Which lever to pull, and what each one actually costs you
The calculator compares three: ten per cent on the rate, two more billable hours a week, and a fifth off fixed costs. They rarely move the date by the same amount, and the one that wins depends on where your year is lopsided — which is exactly why seeing them side by side is worth more than being told that raising prices is good.
Cutting costs looks free and is not. Dropping a tool that saves you two hours a month to save 30 a month is a bad trade at any rate above 15 an hour. The costs worth cutting are the ones you would not notice: the subscription for a project that ended, the plan a tier above what you use, the insurance you never compared.
Adding billable hours is the lever people reach for last and should often reach for first, because it does not require anyone else to agree. It usually comes out of admin rather than out of rest — and if it comes out of rest, it is not a lever, it is a loan against next year.
What break-even does not tell you
It says nothing about whether the work is worth doing. A year that breaks even in February on badly-paid work you dislike is not a better year than one that breaks even in April on work you would choose. The date is a measure of efficiency, not of quality, and treating it as a target on its own leads to a smaller business rather than a better one.
It also ignores seasonality entirely. The calculator spreads your hours evenly across the weeks you work, and almost nobody's year is even: a strong autumn and a dead August produce the same annual figure and a very different cash position in September. Use the week it gives you as a marker, then check where you actually are against it at the halfway point.
Finally, it assumes the rate holds. If half your work is at a discount you agreed two years ago and have not revisited, the date on this page is optimistic — and the honest first move is not a spreadsheet but a conversation.
A plan is only useful if you can check it in August
This sheet tells you where the line should fall. Knowing whether you are ahead of it halfway through the year needs the invoices somewhere they can be added up. The demo opens on the reports view with a year of data behind it, and asks for nothing.
Open the demo →Questions
What counts as a fixed cost for a freelancer?
Anything that bills you whether or not you have work: software subscriptions, professional insurance, the accountant, coworking or a share of the home office, phone and internet, bank and domain fees, professional bodies. Equipment usually belongs here too, spread over the years you expect to use it rather than charged entirely to the month you bought it.
Should my own pay be in the break-even calculation?
Not in this one. Including what you want to earn turns break-even into a revenue target, which is a different and equally useful figure — that is what the rate calculator produces. Keeping them apart lets you see how much of your year is spent funding the business rather than yourself.
How do I break even faster without working more?
Look at the fixed costs first, because they need nobody's agreement, then at the share of your week that is unbilled. Between them they usually move the date more than a price increase does, and both are inside your control. A price increase moves it further but takes longer to land.
Is break-even the same as profitable?
No. Break-even is the moment cumulative contribution covers fixed costs; profit is what accumulates afterwards. A business can break even in March and still end the year with a profit too small to live on, if the hours after March are too few or too cheap.
Does this work if I have a mix of rates?
Use a weighted average of what you actually invoice, not your headline rate. If half your hours go out at a discount, an average is closer to the truth and the date it produces is one you can trust. Running it twice — best rate and worst rate — brackets the answer usefully.