The true-cost-of-doing-business model
Every calculator on meyy.info is built on a single underlying philosophy: your price should be derived from your true cost of doing business, not from a markup multiplier, not from what your competitors charge, and not from what feels right. The true-cost-of-doing-business (CODB) model is borrowed from formal managerial accounting and from the cost-of-services frameworks published by the U.S. Small Business Administration and SCORE. It works the same way whether you are pricing a wedding photography package, a bar of handmade soap, an hour of tutoring, or a freelance translation project.
The model has four components. Direct materials are the physical inputs that go into a single unit of your product or service — the wax in a candle, the lab cost of a photographic print, the ingredient cost of a food-truck menu item. Direct labour is the time you (or your staff) spend producing that unit, valued at the wage you need to take home. Overhead is everything else your business spends money on regardless of how many units you sell — software subscriptions, insurance, marketing, equipment depreciation, rent, professional fees, and the time you spend on unbillable work like bookkeeping and answering emails. Profit margin is the percentage of the final price that you keep as profit after all costs are paid.
The reason this model matters is that overhead is invisible in most pricing advice. A freelancer who quotes an hourly rate based only on the take-home pay they want, without accounting for the 20 to 30 percent of working hours spent on unbillable tasks, will underprice by exactly that fraction. A food truck that prices its menu based only on ingredient cost, without amortising the cost of the truck, the permits, and the labour of the owner-operator, will discover at the end of the year that the business is unprofitable despite a full schedule. The CODB model forces overhead into the price, where it belongs.
Common formula patterns
Across our 36 calculators, five formula patterns appear repeatedly. We document each one here in plain notation so you can recognise them when they appear in a specific calculator and verify the arithmetic yourself.
1. True cost = materials + labour + overhead
The foundational equation. True cost is the total amount of money your business must recover from the sale of one unit (or one hour, or one project) to break even. Materials is the per-unit direct material cost. Labour is the per-unit direct labour cost, computed as hours worked multiplied by the burdened hourly rate (see pattern 4 below). Overhead is the per-unit overhead allocation, computed via pattern 5 below. When a calculator breaks down a price into "materials," "labour," and "overhead" line items, this is the equation it is using.
2. Price = cost ÷ (1 − margin)
The margin-aware pricing equation. Cost is the true cost computed above. Margin is the target profit margin expressed as a decimal (so 35 percent becomes 0.35). The result Price is the price you must charge so that (Price − Cost) ÷ Price equals your target margin. This equation is critical because margin and markup are not the same thing: a 50 percent markup produces only a 33 percent margin. Using markup when you mean margin is the single most common pricing mistake we see. Our calculators use margin, never markup, unless explicitly stated (jewelry keystone markup and photographer edition-based multipliers are the documented exceptions).
Worked example: if your true cost on a candle is $8.20 and you want a 35 percent margin, the price is 8.20 ÷ (1 − 0.35) = 8.20 ÷ 0.65 = $12.62. The profit is 12.62 − 8.20 = $4.42, which is exactly 35 percent of $12.62.
3. Food cost % = (ingredient cost ÷ menu price) × 100
The restaurant-industry standard for pricing food. Ingredient cost is the total cost of all ingredients in one serving, computed from the recipe and the per-ounce or per-unit cost of each ingredient. Menu price is the price charged to the customer. The food cost percentage target varies by segment: 25 to 32 percent for full-service restaurants, 28 to 35 percent for food trucks (per National Restaurant Association benchmarks), and 30 to 38 percent for home bakeries. Inverted, this formula becomes Menu price = ingredient cost ÷ target food cost %, which is the equation our food calculators use to recommend prices.
Worked example: if a food-truck taco costs $1.40 in ingredients and your target food cost percentage is 30 percent, the menu price is 1.40 ÷ 0.30 = $4.67, which rounds to $4.75 or $5.00 depending on your menu engineering strategy.
4. Burdened hourly rate = desired take-home × (1 + unbillable ratio)
The freelance rate equation. Desired take-home is the hourly wage you want to actually put in your pocket. Unbillable ratio is the fraction of your total working hours that goes to unbillable work — admin, marketing, professional development, answering emails — expressed as a decimal. Freelancers Union surveys consistently place this ratio between 0.20 and 0.35 for independent professionals. The burdened hourly rate is what you must charge clients for every billable hour so that, after accounting for unbillable time, your average hourly take-home across all working hours matches your desired take-home.
Worked example: if you want to take home $40 per hour and your unbillable ratio is 0.25 (one in four working hours is unbillable), your burdened hourly rate is 40 × 1.25 = $50. Charging $50 per billable hour gives you $40 per hour across all hours worked.
5. Per-unit overhead = annual overhead ÷ annual units
The overhead allocation equation. Annual overhead is the total of all non-direct costs your business incurs in a year — software, insurance, marketing, rent, equipment depreciation, professional fees. Annual units is the number of units (or billable hours, or projects) you expect to sell in a year. The result is the overhead dollar amount you must build into the price of every single unit. This equation is what makes our calculators produce prices that look "high" compared to a naive multiplier — most makers and freelancers are allocating nowhere near enough overhead per unit because they have never computed the number.
Worked example: if your soap business has $6,000 in annual overhead (software, insurance, market stall fees, equipment depreciation) and you sell 1,200 bars per year, your per-unit overhead is 6,000 ÷ 1,200 = $5.00. Every bar must include $5.00 of overhead, in addition to materials and labour, just for the business to break even.
Calculator-specific formulas
The five patterns above combine in different ways across our catalog. Below is a brief summary of how each calculator family applies them. The detailed worked examples, benchmark tables, and per-calculator formula writeups live in the long-form guide paired with each calculator.
Photography calculators
Wedding, event, and portrait photographer pricing calculators all use pattern 1 plus pattern 2. Direct materials are minimal (memory cards, online gallery hosting). Direct labour is the sum of shooting hours and editing hours, valued at the photographer's burdened hourly rate (pattern 4). Overhead includes gear depreciation, insurance, software subscriptions, and marketing. The photographer print pricing calculator is the documented exception: it uses an edition-based scarcity multiplier (2.0× for open editions up to 6.0× for editions of 5 or fewer) applied to direct cost before margin is added. See the wedding photography package guide and the print pricing guide for the full math.
Handmade & craft calculators
Etsy, handmade product, soap, candle, and jewelry calculators all use pattern 1 plus pattern 2 plus pattern 5. The Etsy calculator additionally models Etsy's fee stack — listing fee, transaction fee, payment processing fee, and the offsite ads fee — as a deduction from the sale price before profit is computed. The candle calculator computes wax cost per ounce from wax weight and fragrance load. The jewelry calculator offers a keystone markup option (2× direct cost) as an alternative to margin-based pricing for makers who follow traditional jewelry retail conventions. See the Etsy fee breakdown, soap pricing guide, candle pricing guide, and jewelry pricing formula guide.
Food & bakery calculators
Food truck, home bakery, custom cake, and catering calculators all use pattern 3 (food cost percentage) as the primary pricing driver, with pattern 1 plus pattern 2 layered in for labour and overhead. The home bakery calculator additionally flags cottage food law restrictions by state. The custom cake calculator uses a complexity tier multiplier (1.0× for buttercream single-tier up to 3.5× for multi-tier fondant with sugar flowers) applied to the per-serving base price. The catering calculator models per-guest pricing with service staff, rentals, and optional gratuity. See the food cost percentage guide and the cake pricing by serving guide.
Freelance services calculators
Translator, interpreter, writer, graphic designer, web developer, and video editor calculators all use pattern 4 (burdened hourly rate) as the foundation, then layer in per-word, per-line, per-project, or per-finished-minute conversions specific to each discipline. The translator calculator additionally models translation memory discounts (per the ATA rate survey) and per-language-pair rate benchmarks. The video editor calculator includes a revision buffer — additional hours priced into the project rate to account for typical revision rounds. See the translation rate by language pair guide and the interpreter vs translator rates guide.
Tutoring & teaching calculators
Home tutor, online tutor, music teacher, and language teacher calculators use pattern 4 with subject-level, grade-level, and credential adjustments drawn from tutoring platform public rate data. The online tutor calculator additionally models platform commission (typically 15 to 25 percent) as a deduction from gross earnings. See the tutoring rate guide and the tutoring overhead guide.
Beauty & wellness calculators
Makeup artist, personal trainer, yoga instructor, and hair stylist calculators use pattern 4 with kit-cost recovery (pattern 5 applied to per-client consumables like hygiene supplies, makeup used per face, or product used per service). The personal trainer calculator additionally models package pricing — session-pack discounts that improve retention without eroding margin. See the kit cost recovery guide and the trainer package guide.
Home services calculators
Cleaning, lawn care, handyman, pet sitting, and dog walking calculators use pattern 1 plus pattern 4 plus pattern 5. The cleaning calculator uses per-square-foot pricing as the primary unit, with frequency multipliers (weekly, biweekly, monthly). The lawn care calculator uses per-acre or per-square-foot pricing with terrain multipliers. See the cleaning square footage guide, the lawn care per-acre guide, and the pet sitting guide.
Events & creative calculators
Event planner, calligraphy, floral, and interior design calculators use pattern 1 plus pattern 2 with discipline-specific cost drivers. The event planner calculator models three pricing structures: percentage of budget (15 to 20 percent), flat fee, and hourly with vendor coordination. The floral calculator uses stem cost × markup multiplier with arrangement complexity tiers. See the event planner budget guide and the florist markup guide.
Pricing fundamentals calculators
The margin-versus-markup calculator exists primarily to demonstrate pattern 2. The subscription pricing models guide (no dedicated calculator yet) covers flat, tiered, usage-based, and freemium models with revenue math for each. See the margin vs markup guide and the subscription pricing guide.
Data sources
Our benchmark ranges, fee percentages, and tax thresholds are drawn from public, verifiable sources. We do not invent numbers. When a benchmark is contested or varies significantly by region, we cite the range rather than a single point estimate. The sources we cite most frequently are:
- U.S. Small Business Administration (SBA) — cost-of-doing-business frameworks, small-business overhead benchmarks, and self-employment tax guidance.
- SCORE — small-business mentorship resources, pricing worksheets, and industry benchmark summaries derived from SBA data.
- Freelancers Union — annual freelance income surveys, unbillable-time benchmarks, and self-employment tax guidance.
- Internal Revenue Service (IRS) — self-employment tax thresholds, quarterly estimated-tax rules, safe-harbour guidance, and Section 179 depreciation schedules.
- Professional Photographers of America (PPA) — wedding and portrait photography benchmark surveys, print cost benchmarks, and cost-of-doing-business worksheets.
- National Restaurant Association (NRA) — food cost percentage benchmarks, prime cost targets, and restaurant industry profit-margin data.
- American Translators Association (ATA) — per-word translation rate surveys by language pair and specialisation.
- Platform-issued fee schedules — Etsy's published fee schedule, tutoring-platform commission disclosures, and marketplace payment processing disclosures, updated when the platform publishes a change.
- State cottage food law statutes — for the cottage food law pricing guide and home bakery calculator, cited to the specific state statute or health-department regulation.
Where a source is paywalled or survey-based, we cite the most recent publicly available summary and flag the date of the survey. We do not cite anonymous blogs, forum posts, or AI-generated content as primary sources. Our editorial policy documents our source-citation standards in full.
Update cadence
Pricing is not static. Etsy changes its transaction fee. The IRS adjusts the self-employment tax threshold. The PPA publishes a new benchmark survey. Platform commission structures change. We review every calculator and every guide on a quarterly cadence — four times per year — against the most recent publicly available data, and we update dollar figures, fee percentages, and benchmark ranges as needed.
When a material change occurs between quarterly reviews — a platform announces a fee increase, a tax threshold changes mid-year, a benchmark survey is superseded — we update the affected calculator or guide as soon as the change is verified and publish a dated correction notice at the bottom of the affected page. Critical errors (broken formulas, incorrect fee percentages, factually wrong benchmarks) are corrected within 48 hours of being reported. Our corrections policy documents the reporting and correction process.
Each calculator and guide displays a "last reviewed" date in its metadata, and this methodology page displays the site-wide last-reviewed date in the hero above. If you find a number that looks out of date, please report it — we read every email and prioritise corrections from working practitioners who can cite the current figure.
Limitations
Our calculators are educational pricing tools, not financial, tax, or legal advice. They have known limitations that you should understand before acting on their output.
Taxes
Our calculators do not compute your tax liability. The freelance rate and tax reserve guides reference IRS self-employment tax thresholds and quarterly estimated-tax rules, but the calculators themselves do not file your taxes, do not know your state and local tax rates, and do not account for deductions, credits, or business structure (sole proprietor, LLC, S-corp). For tax planning, consult a qualified accountant or enrolled agent licensed in your jurisdiction.
Currency and geography
All dollar figures are in U.S. dollars and all benchmarks are drawn from U.S. sources. The calculators work for non-U.S. users — the formulas are currency-agnostic — but the benchmark ranges, fee schedules, and tax references are U.S.-specific. If you are operating outside the United States, treat the benchmark ranges as directional rather than definitive and substitute local benchmarks where available.
Regulations and licensing
The cottage food law pricing guide references state-level cottage food regulations, but we do not maintain a comprehensive licensing database and regulations change. The certified kitchen, health-department, and home-occupation permit requirements referenced in our food and home-services guides vary by jurisdiction and must be verified with your local health department or zoning office. Our calculators do not tell you whether you are legally permitted to sell a given product from a given location — only what you should charge if you are.
Market dynamics
Our calculators compute what you should charge based on your costs and target margin. They do not tell you what your local market will bear, what your competitors are charging, or whether clients will accept the recommended price. A defensible cost-based price is a starting point for negotiation, not a guarantee of sale. Read the paired guide for the industry-specific context on market acceptance, anchoring strategy, and value-based adjustments.
Personal financial situation
Our calculators do not know your full financial situation — your savings, your debt, your spouse's income, your health-insurance situation, your retirement contributions. The "desired take-home" input in the freelance rate calculators is the lever that captures your personal financial needs; the calculator cannot tell you what that number should be. Setting it too low will leave you undercharging; setting it unrealistically high will produce prices your market will not accept.
Assumption sensitivity
Every calculator output is sensitive to its inputs. A 5 percentage point change in target margin can move a recommended price by 10 percent. A 20 percent change in annual unit volume can change per-unit overhead by 25 percent. We recommend running each calculator with a range of inputs — low, medium, high — to understand the sensitivity of the result before quoting a price to a client. The calculators are most useful as a model for understanding the relationship between your costs and your prices, not as a single-number oracle.
If you have questions about a specific calculator's methodology, source data, or limitations, please contact the editorial team. We are happy to walk through the math, share the underlying benchmark data, or discuss adjustments for your specific situation.