Free hourly rate calculator

Find the hourly rate needed to cover your owner pay goal and annual overhead. Leave time for quotes, travel, admin, and the work you cannot bill to customers.

Free to use. No signup needed. Email your breakdown if you want a copy.

Your numbers

USD

Example inputs. Replace them with your own.

What you want to pay yourself before personal taxes.

Insurance, software, equipment, marketing, and other yearly fixed costs.

Allow for holidays, illness, and your slow season.

All business hours, including time you cannot bill.

For example, 60% means 24 paid hours in a 40-hour week.

Minimum hourly rate

$62.50

Billable hours per year
1,152
Annual owner pay goal
$60,000.00
Annual overhead
$12,000.00
Annual revenue needed
$72,000.00

This covers your owner pay goal before personal taxes and the annual overhead entered. Add job-specific supplies, payment fees, and extra profit separately.

How to calculate it

Hourly rate = (annual owner pay + annual overhead) ÷ (weeks × weekly hours × billable share ÷ 100)

A worked example

A $60,000 owner pay goal plus $12,000 in overhead needs $72,000 in annual revenue. At 48 weeks, 40 hours a week, and 60% billable time, you have 1,152 billable hours. Your minimum rate is $62.50 an hour.

Start with billable time

A full working week is rarely a full week of customer-billed hours. Travel, messages, quotes, bookkeeping, and cancellations reduce capacity. Use a realistic billable share rather than assuming every working hour earns revenue.

Separate owner pay from extra profit

This calculation covers an owner pay goal and overhead. It does not add a separate business profit target or calculate personal taxes. Include any extra annual amount you need in your planning and account for job-specific costs separately.

Translate the rate into a fixed-price service

Multiply your rate by the hours a typical job takes, then account for direct costs and payment fees. Check actual job times after a few bookings. A fixed price only works when the scope and time estimate are clear.

Hourly rate questions

How do I calculate my hourly rate as a self-employed worker?
Add your annual owner pay goal and annual overhead, then divide by your expected billable hours for the year. The calculator estimates those hours from working weeks, weekly hours, and billable percentage.
Why does billable time affect the hourly rate?
Paid hours must cover the cost of the time you spend on unpaid business work. With the same annual revenue target, fewer billable hours require a higher rate.
Is this my take-home pay?
No. It is a service rate based on an owner pay goal before personal taxes. Per-job materials, payment fees, and any additional business profit need to be covered separately.
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