The hourly rate calculator helps you to fully understand all your costs and overheads so that you can create a rate that will accurately reflect your salary expectations. Calculating your hourly rate properly is the starting point to getting your quotes right for your clients. In this online tool we'll walk you through:
Below illustrates the calculations used by the tool to find your hourly rate, along with an example.
To start with you'll enter your salary expectation, this should be a reflection of the going rate in your market for your skill set. Once you have this you can enter a tax percentage you'll be expecting to pay. So as an example, you may wish to have a take-home salary of 35,000 and expect your tax to be around 20%.
Next up you need to work out your outgoings, this will include areas such as office rent, travel, software, utilities, insurance, accounting marketing... Our tool provides all the key categories to help you.
For this example let's say you have 1330 of expenses per month totalling 15,960 per year.
In the lifestyle section you can define the time you have available to generate this revenue, specifically covering the following questions:
If you were intending to work 5 days per week, 8 hours per day, with 20 days holiday per year allowing for 5 sick days this would give the following calculation:
This gives us 1,880 hours per year to earn 57,960, but we also need to take into account the time required for admin work and other tasks, i.e. non-billable time. This is provided as a percentage, for example you might expect to have 30% non billable time to give the following:
Next up is profit - on top of your salary how much profit do you want to make? You can set this to zero if your salary is your required outcome, however you may wish to add 10 - 20% profit as well. This would give:
Finally with the above calculations this would come to:
This gives you an hourly rate of 53 per hour rounded up. Try out the tool today to get your hourly rate.
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