How to Calculate Your Hourly Rate

Setting an hourly rate by copying a competitor is a common mistake — their overhead, income goals and billable hours are different from yours. Here's how to calculate your own.

1. Start with your income goal

Decide what personal income you actually want to earn in a year.

2. Add your business overhead

Your rate needs to cover the business's fixed costs too, not just your own income.

3. Work out your real billable hours

Multiply your working weeks by days per week and hours per day — then apply a realistic billable percentage. Quoting, admin, travel and downtime all reduce the hours you can actually charge for; 60–80% billable is typical.

4. Divide and add profit

Divide your income plus overhead by your billable hours for a break-even rate, then add a profit target on top for your recommended rate. The hourly rate calculator does this instantly.