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Billable Hourly Rate illustration

Small Business · Pricing

Billable Hourly Rate

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Use this to set a freelance or consulting rate that covers your income goal plus business expenses across your billable hours.

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Interactive workbench

Freelancer rate

Target Income+Annual ExpensesBillable Hours

$120,000 to cover over 1,200 billable hours needs a $100/hour rate.

Step 1 of 4

Variables and units

  • Target Income

    Annual take-home income you want.

    currency

  • Annual Expenses

    Yearly business costs to cover.

    currency

  • Billable Hours

    Hours you can actually bill in a year.

    count

Common mistakes

  • Using total working hours instead of billable hours.
  • Forgetting taxes and business expenses.

Step-by-step example

Freelancer rate

  1. 1. Start with the example inputs

    • Target Income$90,000
    • Annual Expenses$30,000
    • Billable Hours1,200

  2. 2. Apply the formula

    Target Income+Annual ExpensesBillable Hours

  3. 3. Run the numbers

    $100.00

    $120,000 to cover over 1,200 billable hours needs a $100/hour rate.

What this result means

$100.00 per billable hour is the floor rate that hits your income target after business expenses. The hard part is honest billable hours — admin, sales, and downtime usually consume a third or more of working time, so resist quoting rates from a forty-billable-hour week.