Hourly rate calculator
Start from what you want to earn, add your costs and time off, and see the hourly rate that gets you there, with the working shown.
Use this tool free
Tell us who you are and the tool opens straight away, along with every other free tool and template on this device. We'll email you when we add new ones.
How it works
Your take-home pay, plus what the business costs to run, plus tax.
Take off your weeks off, then multiply by the hours clients pay for each week.
The money you need a year, divided by your billable hours a year, is your rate.
The maths
profit before tax = take-home income ÷ (1 − tax %)money needed = (profit before tax + costs) × (1 + buffer %)billable hours = (52 − weeks off) × billable hours a weekhourly rate = money needed ÷ billable hours
The day figure uses your weekly billable hours spread over a five-day week.
Questions
What counts as a billable hour?
An hour you can put on an invoice. Admin, sales calls, quoting, learning and travel are real work, but most clients do not pay for them directly, so leave them out.
What should I include in business costs?
Everything the business pays for in a year: software, equipment, rent or desk space, insurance, phone and internet, training, accountant fees, and any pension or benefits you pay yourself.
Why set money aside for tax?
If you are self-employed, tax usually comes out of what you earn after costs. Setting a percentage aside means the rate still leaves you your target income. Check the right figure for where you live with an accountant.
What is the buffer for?
Quiet months, late payers and the odd job that runs over. It is a margin on top of your costs and income, so a slow month does not eat into what you need to live on.
Should I show my hourly rate to clients?
You do not have to. Many service businesses use the hourly rate to price packages or fixed-price projects, and quote those instead.
Quote, invoice and get paid from one place.
In startbuddi, your quotes, invoices and client records sit together, so you can see who has paid and who needs a nudge.
