Hourly Rate Calculator

How it works

Works out the hourly rate you need to charge to take home your target salary after taxes, benefits, overhead, time off and unbillable hours.

1. Pre-tax income needed = Desired take-home salary ÷ (1 − Effective tax rate). The Tax row is that amount minus your take-home target.
2. Overhead per year = (Software + Office / rent + Marketing + Vehicle / travel) × 12, plus Insurance, accounting, legal and Equipment / hardware, which are already yearly.
3. Annual revenue needed = pre-tax income + Health insurance / retirement + overhead. Billable hours per year = Working weeks per year × Hours worked per week × billable %.
4. Hourly rate = Annual revenue needed ÷ billable hours, shown to the nearest dollar. If billable hours are zero it shows $0.
5. Day rate (8h) = hourly rate × 8. Project (40h) = hourly rate × 40.

Questions

Why divide by (1 − tax rate)?

Your take-home target is what is left after tax. At a 30% rate, you must earn the target ÷ 0.70 before tax, not the target plus 30%. The result is the pre-tax income shown in the breakdown.

What are billable hours?

Hours you can actually charge for. The slider sets what share of your hours worked count. The rest goes to sales, admin, follow-up, scope changes and free consults. A lower share means a higher hourly rate.

Is this a tax calculation?

No. You pick one effective tax rate and the tool uses it as is. It does not work out federal, state or self-employment tax. It is a planning estimate, not tax or financial advice.