Free Freelance Project Quote calculator with clear step-by-step results.
Builds a fixed-price quote from the bottom up. Contingency covers the hours estimates always miss, overhead recovers the unbillable side of running a practice, and the profit margin is applied as a markup on the total rather than added to the rate - which is the difference between a 15% margin and a 15% markup.
Cost base
Base = hours x (1 + contingency) x rate x (1 + overhead) + direct expenses
Quote
Quote = base / (1 - target profit margin)
A margin is a share of the final price, not of cost. Adding 15% to cost gives a 13% margin; dividing by 0.85 gives a true 15%.
Fifteen to twenty-five percent for well-defined work and considerably more where requirements are vague. If contingency has to exceed 50%, the project needs a discovery phase before it can be fixed-priced.