Turn the income you want into the hourly rate you need to charge, taking billable hours, business expenses and a profit margin into account.
Basic Hourly Rate Calculator
Calculate your hourly rate based on desired annual income.
Comprehensive Rate Calculator
Include expenses and profit margin in your rate calculation.
Income & Time
Business Expenses (Annual)
Market Rate Comparison
Compare different rate structures and utilization scenarios.
What this hourly rate calculator does
- Basic: hourly rate = desired annual income ÷ (billable hours per week × working weeks), with the weekly and monthly equivalents.
- Intermediate: adds software, insurance and taxes, marketing and other expenses, and a profit margin, with a breakdown of what each expense adds per hour.
- Advanced: uses your total available hours and expected utilisation, applies an experience multiplier, compares the result with a market rate, and shows scenarios from 50% to 95% utilisation.
How it is calculated
With expenses and a profit margin, the revenue you need is (income + expenses) ÷ (1 − profit margin), and the hourly rate is that revenue divided by your billable hours.
Worked examples: $100,000 a year over 30 billable hours a week for 48 weeks (1,440 hours) is $69.44 an hour. With $80,000 income, $6,000 of expenses and a 20% profit margin you need $107,500 of revenue, which is $74.65 an hour (or $59.72 with no profit margin).
In the Advanced tab, 40 available hours a week at 60% utilisation over 48 weeks is 1,152 billable hours. For $80,000 plus $6,000 of expenses the minimum rate is $74.65. A mid-level multiplier of 1.5 gives $111.98, with a suggested range of $95.18 to $128.78.
Things to keep in mind
The Advanced tab assumes 48 working weeks a year. The experience multipliers (1.0 for entry level to 2.0 for expert) are a simple guide rather than a market survey, so compare the result with what clients in your field actually pay. Your billable hours are usually fewer than your working hours. These results are estimates for general information only and are not financial, tax or legal advice. Check important figures with a qualified professional.
Frequently asked questions
Why is my billable time lower than my working time?
Time spent on admin, marketing, learning and finding clients is not billable, so the hours you can charge for are fewer.
What is utilisation?
The share of your available working hours that you spend on billable client work.
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