I'm one of those people who feel that sharing is caring. If people in general were more willing to share their freelance rates, income, profit, and business practices, it would be much easier for others to earn a fair salary, and artists would find stability much faster than they do now.
To that end, I've shared spreadsheets for a few years which detail my freelance profit and loss amounts, including invoice breakdowns, tax installment payments (when applicable), and all expenses.
Here's a quick overview; read on for more details:
Want more insight? Check out my Motionographer article about this post.
Below is a link to my overall profit & loss sheet showing trends from 2010 to 2017. From 2014 on, there are links to specific, detailed sheets for those years. Before then I wasn't creating these sheets, so the data is pulled from my tax returns. During most years, the income source is a mix of freelance and salary.
Have I made any dumb math mistakes? Let me know! These sheets mostly been created and used in a vacuum, and I'd love to hear any feedback on how these are constructed and laid out.
What's with the weird censorship?
For the annual detailed sheets, throughout the year I have my own private sheet that I create and update regularly and provide to my accountant for tax return purposes. At the end of the year, I create a copy of this exact sheet and "black out" any private information such as my freelance client names and specific personal info (the company I pay rent to, the name of my lawyers and accountants, subcontractor names, and so on). Otherwise, the sheet you can see is an exact mirror of my private one.
How come some years have "Salary/Job X" in addition to "Invoices"?
Generally, my income is a combination of self-employed income as well as "passive" income via selling add-ons for Adobe After Effects. Some years I take a staff position, so I have a salary on top of the self-employed income, some years I don't.
The tax stuff seems weird...
- In Canada you need to collect and remit sales tax on services, which includes freelance design work. In the States, you don't.
- 2017 was the first year of my working south of the border, so I wasn't paying quarterly installments. This is why "tax remitted" being $0 at end of year.
- Tax rates are assumed to be around 30% before any other deductions or tax credits are applied, so the overall summaries and "net income" figures are estimates, not exact numbers. This is generally accurate, though occasionally not.
- For example: actual effective tax rate in 2016 was 22%, not 30%. In 2017, I assume it'll be closer to 40% given the US 15% self-employment tax rate being added on top of the standard tax bracket, which doesn't exist in Canada.
And what happens in 2013?