Free tool
Hourly rate calculator
Find the hourly rate that pays you what you want, covers your business costs and allows for time off, based on the hours you can actually bill.
What you want to pay yourself, before income tax.
Tools, vehicle, insurance, software, phone.
Hours you can charge for, not quoting, travel or paperwork.
Holidays, sick days and slow weeks.
Your hourly rate
$72,000.00 a year over 1,200 billable hours.
- Income and costs
- $72,000.00
- Working weeks
- 48
- Billable hours a year
- 1,200
- Per hour
- $60.00
The rate is rounded to the cent, half away from zero. It is the least you need to charge; many people round up.
How it works
Your year, divided by your billable hours
- 01
Set the target
The income you want to pay yourself and what the business costs to run each year.
- 02
Be honest about time
The hours you can charge for in a typical week and the weeks you will not work.
- 03
Read the rate
Income plus costs, divided by billable hours in the year, rounded to the cent.
Good to know
Why the rate is higher than a wage
Not every hour is billable
Quoting, travel, buying materials, paperwork and chasing payments all take time nobody pays for. Many people bill 20 to 30 hours in a 40 hour week.
Weeks off are real
Holidays, sick days and slow weeks all come out of the year. Four to six weeks is a common starting point.
Costs come first
Tools, a vehicle, insurance, software, a phone and accounting are paid before you are, so they are added to the income you want.
Income tax is not included
The income you enter is before income tax. If you want a take home figure, add what you expect to pay in tax to the income.
Put it on an invoice
From the number to the document
Questions
Something else? Write to support@sumocat.app.
How do I calculate my hourly rate?
Add the income you want to your yearly business costs, then divide by the hours you can bill in a year. $60,000 of income and $12,000 of costs over 25 billable hours a week for 48 weeks is $72,000 ÷ 1,200 hours = $60.00 an hour.
How many billable hours should I plan for?
Fewer than you work. Count only the hours a client pays for. If you are not sure, track a few typical weeks.
Should I round my rate up?
The result is the least you need to charge to hit the target. Many people round up to a clean number and review it every year.
Can I invoice by the hour in Sumocat?
Yes. Any line can carry a unit like hr, so 7.5 hr at your rate becomes the line amount. Save your rate as an item and reuse it. A free account is all you need.
Send the invoice.
Get paid.
- Free to download
- No caps on invoices
- Works offline