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Required Hourly Rate Calculator

Find the hourly rate to hit your income target.

How it is calculated

The rate is a plain division: hourly rate = income goal / hours. The goal is the amount you want to earn for the period, and hours is the number of hours you will actually bill or work in that same period. Use the same period for both, for example a month of income with a month of hours. The result is shown as a dollar amount. The tool does not subtract taxes, expenses, unpaid admin time or holidays, so those must already be built into the goal or removed from the hours. Hours must be above zero.

Worked example

You want 6,000 a month and expect 120 billable hours. Hourly rate: 6000 / 120 = $50.00 per hour. If only 100 of those hours turn out billable, the same goal needs 6000 / 100 = 60.00 per hour.

Try this example →

Common mistakes

  • Dividing by all working hours instead of billable hours. Time spent on quotes, emails and invoices earns nothing, so the real rate needed is higher.
  • Entering a monthly goal with weekly hours, or the reverse. Both must cover the same period.
  • Using the take-home amount you want as the goal without adding tax and business costs, which makes the rate too low.
  • Forgetting unpaid holidays and sick days when converting a yearly goal into hours.

About this calculator

This calculator divides a target income (weekly, monthly or annual) by the number of hours you plan to work to find the hourly rate required to hit that goal. Taxes, expenses and unpaid time such as vacation or admin work are not subtracted, so build them into the goal or leave them out of the hours.

Freelancers and independent contractors use it when setting a rate for a new client, people considering a job offer paid hourly use it to compare against a salaried role, and side-hustlers use it to see whether a given amount of work time is actually worth it financially.

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Comments (1)

  • Editorial team

    The tool divides your target by the hours, so the target should be the revenue you must bill, not the take-home you want: add tax, insurance, software, equipment and holidays first. For the hours, count only the billable ones, since admin, quotes and chasing invoices are usually unpaid. A lower hours figure raises the rate sharply. What share of your working week do you manage to bill?

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