Harvest
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How to Calculate Billing Rate

Harvest simplifies calculating billing rates by offering detailed reports and flexible billing options, ensuring profitability and 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.

Billing Rate Calculation with Harvest

Discover how Harvest simplifies billing rate calculations with detailed reporting and flexible options to ensure profitability.

Screenshot showing Harvest's billing rate calculation tools.

How to Calculate Billing Rate FAQs

  • To calculate your billing rate, divide your total annual costs by your total annual capacity, and then adjust for your target profit margin. This ensures your rate covers all expenses and includes a profit.

  • Consider factors like employee roles, project types, and non-billable hours. Harvest helps track these, providing insights to adjust rates for profitability.

  • Harvest provides tools to track billable and non-billable hours, allowing for accurate billing rate calculations. It offers detailed reports and integrates with accounting software for seamless financial management.

  • Yes, Harvest supports various billing methods, such as Time & Materials and Fixed Fee, allowing businesses to adapt billing rates based on project needs and complexity.

  • Non-billable hours can significantly affect income, potentially leading to a 15-20% loss in billable income. Harvest tracks these hours, helping businesses adjust their billing rates accordingly.

  • Harvest integrates with accounting tools, ensuring your billing practices are compliant with industry regulations, including VAT and GST requirements.

  • Common payment terms include "Net 30," "Net 60," and "Due on Receipt." These terms specify when payment is due, typically within 30 to 60 days after invoice issuance.