How to set an hourly rate (2024)

FAQs

How to set an hourly rate? ›

To calculate your own ideal hourly rate, divide your adjusted annual salary (your desired annual salary + your costs and expenses) with your number of billable hours, and then round up this figure, to the nearest dollar.

You can get a general idea of your hourly rate by averaging the number of weekly hours you work over a certain period of time, like a month or two. Divide weekly pay by hours worked. Divide your weekly salary by the number of hours you work per week—or the average hours worked per week.

First, determine the total number of hours worked by multiplying the hours per week by the number of weeks in a year (52). Next, divide this number from the annual salary. For example, if an employee has a salary of $50,000 and works 40 hours per week, the hourly rate is $50,000/2,080 (40 x 52) = $24.04.

Desired profit amount + desired salary + operating costs / number of income producing hours = your hourly rate. For example: Desired profit of $16,500 + desired personal pre-tax salary of $83,500 + operating costs of $30,000/1040 income generating hours = $125 per hour.

Since most online applications these days force you to fill in the answer, you're going to have to give them something. But instead of providing a number, try writing “negotiable,” or “market rate.” If you're forced to put in a number, try giving a salary range.

To calculate your own ideal hourly rate, divide your adjusted annual salary (your desired annual salary + your costs and expenses) with your number of billable hours, and then round up this figure, to the nearest dollar.

18-24 years – $16/hour. 25-34 years – $19/hour. 35-44 years – $24/hour. 45-54 years – $27/hour.

Cost-per-hour is determined by taking fully-loaded-cost in a time period and dividing it by the total number of hours available in that same time period. For example, $100k annual cost / 2080 annual hours = $48 cost per hour.

How do you suggest hourly rate? ›

A general guide to calculating your hourly rate as an independent contractor is to multiply your hourly wage as a permanent employee by 50 to 75 percent. Then, add it to your hourly. When you work with a range, you can be flexible depending on the length of the contract, industry, and location.

Next time a client asks you for your hourly rate, respond with this script: “Thanks for asking. We don't bill by the hour. We have found that it is better, for both our clients and us, to create a detailed project scope and a fixed price.

To calculate the hourly rate, divide the annual salary by the number of hours worked per year. For example, an employee who earns $50,000 per year and works 2,080 hours per year would have an hourly rate of $24.04 ($50,000 / 2,080 hours).

If you want to know how to determine pricing for a service, add together your total costs and multiply it by your desired profit margin percentage. Then, add that amount to your costs. Pro tip: Consider your costs, the market, your perceived value, and time invested to come up with a fair profit margin.

Next time a client asks you for your hourly rate, respond with this script: “Thanks for asking. We don't bill by the hour. We have found that it is better, for both our clients and us, to create a detailed project scope and a fixed price.

To calculate your effective hourly rate, take your yearly income and divide it by the hours you work each year. If you don't have enough data for a full year, you could also take your latest monthly income and divide it by the hours you worked that month. You can even do this on a weekly basis.

But salaried employees enjoy more benefits for the most part, such as paid vacation and sick days, retirement accounts, and other employer-sponsored benefits. Hourly workers don't usually receive compensation in the form of paid leave by the companies who hire them and they may be responsible for their own healthcare.