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Calculate Billing Rate

Harvest empowers professionals to calculate and manage their billing rates effectively, addressing the challenge of covering costs and generating profit with precision.

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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.

Calculate Billing Rate with Harvest

Explore how Harvest helps calculate and manage billing rates effectively, ensuring profitability through detailed tracking and reporting.

Screenshot of Harvest's billing rate calculation feature.

Calculate Billing Rate FAQs

  • When calculating your billing rate, consider your total annual business costs, desired profit margin, and realistic billable hours. For instance, freelancers typically aim for a 20% profit margin and account for 60% billable hours of their total working time. Including these factors ensures your rate covers costs and generates profit.

  • Include all business expenses such as rent, utilities, and salaries when calculating your billing rate. Divide these total costs by your billable hours to find the break-even rate. Adding a profit margin to this number ensures your rate is both competitive and profitable.

  • The pay rate is the internal cost of delivering a service, while the bill rate is what clients pay. The bill rate includes the pay rate plus overhead, profit, and any additional expenses, ensuring the business covers its costs and earns a profit.

  • It's recommended to review and adjust billing rates annually or semi-annually. This allows you to account for changes in costs, market demand, and your own experience or expertise level. Regular adjustments ensure your rates remain competitive and profitable.

  • Research market rates and understand your value proposition to set a competitive rate. Ensure it covers all costs and includes a reasonable profit margin. Tools like Harvest can help track hours and generate reports, aiding in evaluating and adjusting your rates effectively.

  • Harvest offers flexible billing methods and detailed tracking of billable hours, helping you differentiate between employee hourly rates and billable rates. This ensures accurate billing rate calculations tailored to your project types and roles.

  • Yes, Harvest allows you to track both billable and non-billable hours, providing a comprehensive view of where time is spent. This feature helps in assessing productivity and adjusting billing rates to reflect actual work dynamics.

  • Harvest integrates with tools like QuickBooks, Xero, and Stripe, allowing seamless management of billing and invoicing processes. These integrations help streamline financial operations, ensuring efficient tracking and billing.