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ProGuard is free. You can use it freely for processing your applications, commercial or not. Your code obviously remains yours after having been processed, and its license can remain unchanged.
The ProGuard code itself is copyrighted, but its distribution license provides you with some rights for modifying and redistributing its code and its documentation. More specifically, ProGuard is distributed under the terms of the GNU General Public License (GPL), version 2, as published by the Free Software Foundation (FSF).
In short, this means that you may freely redistribute the program, modified or as is, on the condition that you make the complete source code available as well. If you develop a program that is linked with ProGuard, the program as a whole has to be distributed at no charge under the GPL.
We are granting a special exception to the latter clause (in wording suggested by the FSF), for combinations with the following stand-alone applications: Gradle, Apache Ant, Apache Maven, the Google Android SDK, the Intel TXE/DAL SDK, the Eclipse ProGuardDT GUI, the EclipseME JME IDE, the Oracle NetBeans Java IDE, the Oracle JME Wireless Toolkit, and the Simple Build Tool for Scala.
The ProGuard user documentation is copyrighted as well. It may only be redistributed without changes, along with the unmodified version of the code.