Derive the hourly rate needed to hit a target income after overhead on billable hours.
Overview
Freelancers often underprice because they forget non-billable time and overhead like software, insurance, and taxes.
Enter target annual income, yearly billable hours, and an overhead percent. The tool inflates income for overhead, then divides by billable hours.
Billable hours are usually far below 2,080—vacation, sales, and admin shrink the denominator and raise the required rate.
Steps
What you want to take home (or pay yourself) annually.
Hours you can actually invoice in a year.
Buffer for tools, insurance, and unbillable work.
Read the required hourly rate and revenue needed.
Multiply rate by estimated project hours.
Math
hourlyRate = targetIncome × (1 + overhead%/100) / billableHours
Inflate target income by overhead, then divide by billable hours for the rate.
Worked cases
80,000×1.25/1,200 ≈ $83.33
About $83/hr.
100,000/900 ≈ $111.11
About $111/hr.
112,000/1,200 ≈ $93.33
About $93/hr.
Why use this
Questions