Service Business Hourly Rate Calculator
Find the hourly rate that actually pays you. Enter the take-home income you want, your business costs, taxes and how many hours you can really bill.
How the service business hourly rate calculator works
Many owners pick an hourly rate by looking at competitors. This hourly rate calculator works the other way: it starts from the income you want and works out the rate you must charge to earn it after tax, expenses, time off and unbillable hours.
The billable share is the number that surprises most people. If you work 40 hours but only 24 are billed, your real rate has to cover the other 16.
All figures are examples. Use your own income goal, last year’s expenses and an honest count of billable hours.
The formulas
Frequently asked questions
How do I calculate my hourly rate?
Work out the revenue you need to cover your income goal, taxes and expenses, then divide by the hours you can actually bill.
What is a billable hour?
An hour you can charge a customer for, as opposed to time spent quoting, driving or doing paperwork.
Should I include taxes in my rate?
Yes, if you are self-employed. Your rate must cover the tax you set aside, not only your take-home pay.
Can I use this for flat-price jobs?
Yes. Estimate the hours a job takes and multiply by this rate as a minimum price.
Want quotes and profit in one Excel file?
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Estimates only. Results depend on the numbers you enter and are not financial, tax or legal advice.