What should I charge an hour?
The rate that actually pays you what you meant to earn — with the hours nobody invoices and the weeks nobody pays for in it. Free, nothing to sign up for.
Charge an hour
£41.07
A full day
£328.56
Billable hours a year
1,316
of 1,880 worked
That rate brings in £54,050 across the year, which covers £47,000 of wage and overheads and leaves the rest as profit.
The sum most people do — wage divided by every hour worked, 52 weeks a year — gives £16.83 an hour. Working at that rate covers your wage only if nothing ever goes unbilled, you never take a week off, and the van pays for itself.
Four things the obvious sum leaves out
Wage divided by hours is the sum almost everybody does, and it is wrong in the same direction every time — it produces a rate that is too low, and a rate that is too low never announces itself. The work comes in, the diary is full, and the year ends with nothing in it.
- Billable hours are not worked hours. Quoting, driving, merchants, chasing money and the books are hours nobody pays for. Bill six or seven of a nine-hour day and the honest divisor is a third smaller than the one you used.
- Time off is time with no income. An employee’s five weeks of holiday are paid by somebody else. Self-employed, those weeks are carried by the other forty-seven, and so is anything lost to illness or weather.
- Overheads are owed whether the phone rings or not. A year of van, insurance, tools, phone and accountant, spread across the hours you can actually invoice.
- Profit is not the wage. The wage is what your labour costs. Profit is what replaces the van and gets you through a quiet March.
The figure to be honest about is the billable share
It is the one people guess highest on. A fortnight of timesheets settles it: write down the hours that ended up on an invoice and the hours that did not. Nearly everybody finds the real number is lower than the one they assumed, and it moves the rate more than any other box on this page.
Recording time against jobs is how that number stops being a guess — and it is the same record that tells you which kind of work actually pays.
A rate is not a price
This gives you the floor: below it you are working for less than you decided to earn. What a particular job is worth can be more than the floor — a day of awkward access, a call-out at six in the evening, work nobody else in the area will take.
For work priced by the day rather than the hour, the day rate calculator counts the days on site, part days rounded up.
A note on what this is
A guide, not advice. It says nothing about tax: the wage box is what the business pays you before any of it.
Built by TaskMyJob, which tracks the hours and the money against each job so the billable share stops being a guess. More free tools: markup and margin, VAT, or all of them.