Free calculator
The hourly rate your business needs to charge.
Enter what you want to pay yourself in a year, what the business costs to run in a year, and how many hours you can actually bill. The calculator gives the rate that covers both, and the lower break-even rate that covers overhead alone.
Your hourly rate
- Rate to charge per hour
- $55.56
- Break-even rate per hour
- $13.89
- Billable hours per year
- 1,440
- Revenue needed per year
- $80,000.00
How it is calculated.
The same sum, in plain words.
Billable hours per year are the weeks you work, times the billable hours in each of those weeks.
Your hourly rate is your target pay plus your yearly overhead, divided by your billable hours per year. The break-even rate is your yearly overhead alone, divided by the same hours. Both are rounded up to the cent.
Questions about this calculator.
What counts as a billable hour?
An hour a customer pays for. Driving between jobs, quoting, ordering materials, chasing invoices and doing the books are all real work, but unless you charge for them they are not billable. If you work 50 hours a week and bill 30 of them, enter 30. Counting every hour you work is the quickest way to set a rate too low.
Should my target pay be before or after tax?
Before. The calculator does not work out tax. If you have an after-tax figure in mind, add what you expect to owe in income and self-employment tax to it first, or the rate will come out too low. An accountant can tell you what to allow for where you live.
What goes in yearly overhead?
Everything the business pays for whether or not you are on a job: insurance, vehicles and fuel, tools and equipment, software, phone, rent, licences, advertising, and any staff whose time you do not bill. Materials you charge back to the customer on a job do not belong here, because that job pays for them.
What is the break-even rate for?
It is the floor. Below it, each hour you bill fails to cover what the business costs to run, before you have paid yourself anything. It is useful when deciding whether a discounted job is worth taking, not as a rate to quote.
Where VERA comes in.
VERA builds quotes from your own pricing, so the rate you settle on here is the rate every quote starts from, and each one shows its margin before you approve it.
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Calculate the late fee on an overdue invoice from a monthly rate or a flat fee and the days late. Late fee limits vary by state; this is not legal advice.
See what VERA can do for your business.
Try it with the built-in demo data, no credit card, no API keys. VERA proposes the work and waits for your approval before it acts.