Hourly Rate Calculator
Your hourly rate has to cover the pay you want and every business cost, but only from the hours clients actually pay for. Travel, admin, sales and holidays are not billable, so the rate is higher than your target pay divided by 2,080 hours. Enter your own numbers to see the minimum rate, the billable hours it assumes and the revenue you need each year and each working week. The starting values are examples only.
Enter your numbers
The starting values are examples. Calculations stay in your browser.
Billable hours are the hours a client pays for, not every hour you work. The result is before income tax unless you include tax in your pay or costs. It is a planning number from your inputs, not pricing advice.
How the calculation works
- Billable hours per year = billable hours per week × working weeks per year.
- Revenue needed per year = (pay you want + business costs per year) × (1 + buffer % ÷ 100).
- Minimum hourly rate = revenue needed per year ÷ billable hours per year.
- Revenue needed per working week = revenue needed per year ÷ working weeks per year.
The result is a planning scenario from the numbers you enter. It is not a forecast, a quote or tax advice.
Questions
Why is my rate so much higher than my old hourly wage?
An employer pays for equipment, software, insurance, holidays and the hours you spend on admin. When you work for yourself, those costs and unpaid hours come out of your rate. Dividing the same yearly pay by fewer billable hours, and adding costs, gives a higher hourly number.
How many billable hours should I enter?
Enter the hours you expect clients to pay for, not the hours you work. Many solo service owners spend part of each week on sales, quotes, travel and bookkeeping. Track a few weeks of your own time to get a realistic number instead of guessing.
What should go in business costs?
Yearly costs that do not depend on one job: software, phone, insurance, accounting, vehicle costs you do not bill separately, equipment replacement, training and marketing. Add your own retirement savings or health cover here if you want the rate to pay for them.
What is the buffer for?
It adds a margin on top of pay and costs for slow months, late payments, unexpected repairs and profit for growth. Set it to zero to see the bare minimum rate.
Does this include income tax?
Only if you include it. Either enter your target pay before tax, or add an amount you set aside for tax to business costs. Tax rules differ by country and situation, so check with a tax professional.
Can I put this calculator on my website?
Yes. Copy the embed code on this page. The embedded version keeps a small credit link to BizAI.
Embed this calculator
Add this free calculator to your blog, course or client resources. Paste the code into an HTML block. It is free to use and keeps a small credit link to BizAI.
Use it with a real business idea
Each of our business idea guides loads this kind of calculator with an example budget and price for that business. Other free tools: Small Business Profit CalculatorBreak-Even CalculatorMarkup and Margin CalculatorSmall Business Loan CalculatorStartup Cost Calculator.