Money ManagementETF vs Mutual Fund: Which Is Better for Beginners?
ETF vs Mutual Fund: Which Is Better for Beginners? Explore costs, tax implications, and trading flexibility for informed investment decisions.
MAJun 11, 2026Read More →
Hourly Billing Rate Calculator
Find the hourly rate you need to charge to hit your income goal after costs, time off and non-billable hours. Enter your numbers and press Calculate.
Written by TopicDrill Editorial Team·Updated June 2026
Advertisement
How the billing rate is worked out
The rate starts from what you actually want to keep. Add the take-home income you are aiming for to your yearly business costs, such as software, equipment, insurance and the taxes you set aside. That total is the revenue your business has to bring in.
Next, count the hours you can really sell. Take 52 weeks, subtract unpaid time off, then multiply the remaining weeks by your weekly hours and the share of those hours that are billable. Dividing revenue by those billable hours gives the rate you need per hour.
A quick example
Suppose you want $80,000 take-home, have $15,000 of business costs, take 6 weeks off and work 40 hours a week with 70 percent billable. That leaves about 1,288 billable hours, so you need roughly $74 an hour, or about $590 for an eight hour day, just to hit the plan.
Things to keep in mind
Your rate is a starting point, not a ceiling. Value, demand and specialism let you charge more. For broader pricing and small business guidance, the U.S. Small Business Administration is a solid reference. Compare scenarios with our other free calculators.
Frequently asked questions
How do I work out my hourly billing rate?
Add the income you want to take home to your annual business costs, then divide by the number of billable hours you can actually sell in a year. Because not every working hour is billable, you charge more per billable hour to cover the gaps.
Why is billable percentage so important?
Admin, marketing, invoicing and downtime are not billable, yet they fill real hours. If only 70 percent of your time is billable, you have far fewer paid hours to spread your costs across, so your rate has to rise to compensate.
Should my rate include taxes?
Yes. Include self-employment and income taxes, plus retirement savings and health coverage, inside your business costs or target income. Freelancers who forget taxes often set rates that leave them short at the end of the year.
Is the calculated rate a floor or a target?
Treat it as a floor. It is the minimum that keeps you solvent at your chosen workload. If demand is strong or your work is specialized, you can and should charge above it.
Related guides
View all →
Business FinanceHow Much Will $1,000 Invested Today Be Worth in 10 Years?
Invest $1,000 today and the answer to "what's it worth in 10 years?" ranges from about $1,040 in a basic savings account to roughly $2,594 at the stock market's long-run average. Here's the math behind every scenario — plus how inflation, fees and taxes change the real number.
MAJun 9, 2026Read More →
Business FinanceHow Much Do You Need to Retire Comfortably? (2026 Guide)
There's no single magic number for retirement — but there are proven formulas that get you close. Using the 4% rule, most people need roughly 25 times their annual spending invested. Here's how to find your personal target, factoring in Social Security, healthcare, inflation and lifestyle.
MAJun 9, 2026Read More →
Advertisement