Calculate& Decide

Business calculator

Hourly Rate Calculator

This calculator spreads your desired annual income and business costs across realistic billable hours rather than every hour worked.

Updated · Inputs stay in your browser

Educational estimate: This result is not financial, tax, legal, or investment advice. Check real terms and consider qualified advice for important decisions.

Enter your values

Choose the symbol used to display amounts.
Personal income target before tax.
Tools, insurance, workspace, and similar costs.
All available work hours.
Exclude planned time away.
Share of work hours charged to clients.

Your values stay on this device. Nothing is sent to Calculate & Decide unless you deliberately use your device's share feature.

What this result means

This calculator spreads your desired annual income and business costs across realistic billable hours rather than every hour worked. The results panel explains the main number and the quantities that produced it, so you can check whether the estimate answers your real question.

Formula used

Target hourly rate = (Desired income + Annual business costs) ÷ (Hours per week × Weeks per year × Billable percentage).

Step-by-step calculation

  1. Validate every required value and reject values outside the stated field limits.
  2. Convert rates and time periods to the units required by the formula.
  3. Calculate with full JavaScript number precision; do not round intermediate values.
  4. Round only the displayed result and explain the practical meaning.

Worked example

A $60,000 income target plus $12,000 costs, over 35 hours for 48 weeks at 70% billable time, requires about $61.22 per billable hour before tax.

Assumptions and limitations

  • The billable percentage reasonably reflects administration, sales, and unpaid work.
  • Income and expenses are annual, before personal tax.
  • The calculation excludes profit buffer, bad debt, and benefits unless included in inputs.

How to use this calculator

  1. Choose a currency symbol when the tool uses money.
  2. Enter values in the units shown beside each field.
  3. Select Calculate, then read both the main result and interpretation.
  4. Change one uncertain input at a time to understand sensitivity.
  5. Use Copy result or Share only when you choose to move the result outside this page.

Common mistakes

  • Dividing only by total working hours even when many hours are not billable.
  • Forgetting leave, holidays, software, insurance, and other business costs.
  • Treating the minimum target as the only possible market price.

Frequently asked questions

What is billable percentage?

It is the share of available work hours that can actually be charged to clients.

Does this include tax?

Only if you add the expected tax amount to the income or cost target.

Should I round the result?

You can round up to a practical rate and test whether it covers uncertainty.

Methodology and sources

Formula definitions and edge-case behavior are documented on our Methodology page. No external data is fetched by this calculator.

See the site-wide calculation methodology and editorial standards. Formula errors can be reported through the error-reporting instructions.

Published and reviewed .