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Billing Rate Calculator

Harvest empowers professionals to set accurate billing rates by tracking both billable and non-billable hours, ensuring profitability and precise invoicing.

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What should you charge per hour?

Most freelancers and consultants dramatically undercharge. This calculator accounts for what most people miss: non-billable time, taxes, and overhead.

$
Accounting for vacation, holidays, sick days
60%
Most freelancers can bill 50-70% of their time. The rest goes to admin, marketing, proposals, and learning.
$
Software, insurance, equipment, accounting, taxes beyond income tax, etc.
Your break-even rate $0
Recommended rate (+20% buffer) $0
Billable hours per week 0h
Equivalent daily rate $0

Start tracking your billable hours

How this hourly rate calculator works

It works back from the income you need to the rate you must bill, accounting for the hours you can't bill.

  • Billable hours/year = working weeks × hours per week × billable %.
  • Break-even rate = (target income + business expenses) ÷ billable hours.
  • Recommended rate = break-even plus a 20% buffer for taxes, slow periods, and profit.

Raising your billable percentage or trimming expenses lowers the rate you need.

Billing Rate Calculator with Harvest

See how Harvest tracks billable hours to help you calculate accurate billing rates and maintain profitability.

Screenshot of Harvest's billing rate tracking feature

Billing Rate Calculator FAQs

  • When calculating your billing rate, consider your total annual costs, including salary, benefits, overhead, and taxes. Also, factor in your realistic billable hours, desired profit margin, and market demand for your services.

  • To account for non-billable time, estimate your total annual working hours and subtract time spent on holidays, vacations, and administrative tasks. This helps you determine your realistic billable hours and set a rate that covers all expenses.

  • Yes, a common formula involves calculating all costs, estimating billable hours, determining the break-even rate, and adding a profit margin. Adjust the multiplier based on industry norms, such as 2x to 4x for consulting.

  • To ensure competitiveness, compare your rates against industry benchmarks and consider regional differences. For example, IT consulting rates in the USA range from $100 to $300 per hour, depending on demand and expertise.

  • Common mistakes include underestimating costs, not accounting for non-billable hours, and failing to adjust rates for market changes. Regularly review your rates to align with business goals and industry standards.

  • Yes, a billing rate calculator can be adapted for both freelance and agency work by factoring in specific cost structures, utilization rates, and market conditions relevant to each setting.

  • Harvest helps track both billable and non-billable hours, providing a clear picture of time spent on tasks. This data is essential for setting accurate billing rates and ensuring they cover all necessary expenses.

  • Regional differences, such as cost of living and market demand, significantly impact billing rates. For instance, in high-cost areas like California, rates are typically higher than in regions with lower operating costs.

  • Billable hours are those charged to a client, directly generating revenue. Non-billable hours include activities like administration and training, which do not directly earn income but are necessary for business operations.