How to Use an Hourly Billing Calculator: A Quick Guide
One of the more difficult aspects of working as a freelancer is determining what to charge. If your quote is too low, you are effectively paying for labor. Clients resist quotes that are too high and lack a clear breakdown. The guesswork is eliminated in both directions with this calculator.
Most people begin with a fee-to-hourly rate. After agreeing on a project fee, you must determine whether it makes sense. After entering the total cost, deduct your expenses, apply your overhead % (taxes, software, administrative time), and divide the remaining amount by the number of hours you anticipate working:
Hourly Rate = (1 − Overhead%) × (Fee − Expenses) × Hours
The job is not worth accepting at that price if that figure is less than your lowest acceptable rate.
Conversely, going from hourly rate to project fee operates as follows:
Rate × Hours + Expenses × (1 + Margin%) = Project Fee
It is important to pay attention to the margin field. It is the profit you are making on top of your actual costs; it is not the same as overhead. The unforeseen hours that practically every project silently accrues are covered by even a 10–15% buffer.
Additionally, the calculator displays your implied daily rate (8 hours) and monthly equivalent (160 hours), which is helpful when contrasting a project price with a retainer or salary offer. To share the breakdown with a client or to maintain a record, download the PDF.