Worked hours and billable hours are not always the same
An eight-hour workday with two hours of admin or sales may provide only six billable hours. The denominator you choose can change the required rate substantially.
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Calculate required hourly rate from target monthly income.
Work backward from a target monthly income to the average hourly rate required from working days and hours per day. It is useful for freelance or side-work pricing when you want a minimum revenue rate.
20 × 7.5 = 150 hours. 300,000 ÷ 150 = 2,000 per hour.If sales, administration, learning, tax or benefits must be funded too, either raise the target monthly revenue or enter only the hours that can actually be billed.
An eight-hour workday with two hours of admin or sales may provide only six billable hours. The denominator you choose can change the required rate substantially.
The calculator treats the entered monthly amount as the revenue target. Add business expenses, tax reserves or other required overhead before calculating when appropriate.
Rounding up avoids displaying a nominal rate that falls just short of the monthly target.
Keeping the same monthly goal while reducing workdays or daily hours raises the amount each billable hour must produce.
Market rates, project risk, non-billable revisions and value delivered can all justify a project price that differs from the simple hourly break-even rate.
Related references: SI prefixes & units · Number formats · Cooking measures