Salary & Income
Hourly Rate Calculator
Find the minimum hourly rate you must charge to meet your annual income goal — with separate overhead and profit buffers to arrive at a truly sustainable rate.
Gross revenue target (before taxes and expenses).
Exclude vacation; 50 = 2 weeks off.
Covers unpaid admin, non-billable time, expenses.
Added on top of overhead for sustainable growth.
🔒 All calculations happen instantly in your browser. No data is sent to any server.
How the calculation works
Base Rate = Annual Income Goal ÷ (Hours/Week × Weeks/Year)
Rate with Overhead = Base Rate × (1 + Overhead% ÷ 100)
Recommended Rate = Rate with Overhead × (1 + Profit% ÷ 100)
Example: Goal $90k · 40 hrs/week · 50 weeks · 20% overhead · 10% profit
Base = $90k ÷ 2,000 = $45 → With overhead = $54 → Recommended = $59.40/hr
Frequently Asked Questions
- The Freelance Rate Calculator works backwards from a desired after-tax net income, accounting for self-employment taxes and business expenses. This Hourly Rate Calculator works from a gross revenue goal with overhead and profit buffers — ideal for businesses or consultants quoting projects.
- 15–25% covers typical admin time, non-billable hours, and business costs. If you have significant non-billable time (sales calls, project management, invoicing), use 25–40%. Very efficient consultants doing pure billable work can use 10–15%.
- Overhead covers break-even costs; profit is what lets you invest in growth, weather dry spells, save for retirement, and build a buffer. A 10–20% profit margin makes the rate sustainable long-term.
- A 40-hour week for 50 working weeks = 2,000 hours. But not all are billable — admin, sales, and professional development are real costs. Using 1,500–1,800 billable hours is more realistic for most knowledge workers.
- Use it as a floor. Charge more for specialist expertise, tight deadlines, or complex projects. Never quote below your calculated rate — doing so erodes value and makes the work unprofitable.