Hourly Rate Calculator

Calculate the hourly rate needed to cover expenses and hit your annual income target.

Inputs

The pre-tax income you want to take home before expenses.

Software, insurance, taxes, contractors, tools, and admin.

Weeks available after vacation, holidays, and downtime.

Hours you can realistically invoice each working week.

How it works

  1. 1. Set income target

    Start with the annual income you want the business to fund.

  2. 2. Add expenses

    Include operating costs so the rate covers more than labor.

  3. 3. Divide by capacity

    Spread required revenue across realistic billable hours.

Frequently asked questions

How is hourly rate calculated?

The calculator adds target annual income and business expenses, then divides that total by annual billable hours.

Why use billable hours instead of total work hours?

Admin, sales, operations, and downtime are real work, but they are not always invoiceable. Pricing from billable hours keeps the rate grounded in paid capacity.

Should taxes be included in expenses?

If you want the rate to reserve money for taxes, include an estimated tax amount in annual business expenses.