Hourly rate calculator
Translate annual income, overhead and billable capacity into a planning rate.
How it works & useful details
Formula & assumptions
Annual revenue goal is income before personal tax plus overhead, then an optional reserve percentage on their sum. Annual billable hours = working weeks × hours per week × billable percentage. The rate is revenue goal ÷ billable hours, rounded UP to cents. Reserve is an addition to cost, not a profit-margin or income-tax calculation. Weeks: 1–52; hours/week: 1–80; billable percentage: greater than 0 through 100.
Local planning workspace
These tools are planning aids, not financial, tax or legal advice. Values stay in this page. Nothing is sent, saved to your records or fetched from external services.
USD, EUR, GBP, CAD and AUD are labels with two decimal places. There is no currency conversion. Enter decimals with a dot and no commas. Money inputs are limited to 1 billion units; calculated amounts to 10 trillion. Rates are supplied by you, with up to four decimal places.
About this tool
Hourly rate calculator turns the income you want to earn into a planning rate per billable hour. It accounts for the hours you actually bill, working weeks per year, and annual overhead so the rate covers both your time and the cost of running the business.
Everything is calculated locally from the figures you enter. There is no currency conversion; amounts keep the currency you have in mind and are treated as plain numbers.
How to use it
- Enter your target annual income before tax.
- Add annual overhead costs and the number of working weeks per year.
- Set billable hours per week to reflect real, client-billed time.
- Read the resulting planning rate and adjust the inputs to test scenarios.
Worked example
A freelancer wants 60,000 a year in income before personal tax, has 12,000 of annual business overhead, and adds a 10% reserve for slow months and equipment.
- Reserve: 10% of (60,000 + 12,000) = 7,200.
- Annual revenue goal: 72,000 + 7,200 = 79,200.
- Billable hours: 46 working weeks × 40 hours × 60% billable = 1,104 hours.
- Hourly rate: 79,200 ÷ 1,104 = 71.739…, rounded up to 71.74.
The rate is rounded up rather than to the nearest cent, so charging it for every billable hour reaches at least the revenue goal.
Why the billable share matters most
Most new freelancers overestimate billable time. Proposals, invoicing, admin, learning, and gaps between projects all take hours that no client pays for. Moving from 60% to 75% billable in the example lowers the required rate from 71.74 to 57.40. Moving down to 45% raises it to 95.66. Test a few realistic values before you publish prices.
Working weeks should exclude holidays, public holidays, and expected sick days. The tool accepts 1 to 52 weeks and 1 to 80 hours per week.
Frequently asked questions
Why is the rate higher than income divided by hours?
Because it also covers overhead and only counts genuinely billable hours. Non-billable admin, marketing, and holidays reduce billable capacity.
Does it include taxes?
No. It works with pre-tax planning numbers you supply and does not model income tax, VAT, or social contributions.
Is my data sent anywhere?
No. Calculations stay in the page, and refreshing clears your inputs.