MihsabaShare this free calculator
Send this tool to someone who needs the calculation.
How to use
- Enter Income target.
- Enter Billable hours.
- Calculate, then review the period, scope and assumptions before using the result for pricing or planning.
How it is calculated
Hourly rate = income target ÷ billable hours
Example
An income target of 120,000 across 1,200 billable hours requires an arithmetic billing rate of 100 per hour before expenses and taxes.
Important notes
Use realistic billable hours rather than total work hours; marketing, administration, learning and leave reduce the hours you can invoice.
Worked examples and interpreting results
| Case | Calculation | Result |
|---|---|---|
| Required rate | 120000 ÷ 1200 | 100 |
| Income target | 120000 | 120,000 |
Frequently asked questions
Should expenses be added before setting the rate?
If your target is income after business expenses, add expenses to the revenue target or use the expense-adjusted rate calculator.
Is the result a mandatory client price?
No. It is a planning result from your inputs; final pricing depends on scope, market, contract, taxes and risk.
Should I use monthly or annual figures?
Keep all inputs on the same period so annual income is not mixed with monthly hours or expenses.