Hourly Rate Calculator
Stop pricing by gut. Enter your desired salary, overhead, taxes, and billable hours — get the hourly rate that actually covers everything and still leaves you a profit.
Your numbers
Your rate
Why your hourly rate is not your hourly wage
The single most common pricing mistake in professional practices is charging "what everyone else charges" — which usually means covering the salary and forgetting that self-employment taxes, overhead, and profit all come out of the same hourly rate. If you want to take home $90,000 and charge $45/hour for 30 billable hours a week, the math does not work: $45 × 30 × 48 weeks is $64,800 gross, before a single dollar of taxes or rent.
This calculator works backward from your target: it grosses up your salary for taxes, adds overhead, adds your profit margin, and divides by your real billable hours. The result is the rate you need to charge — the number most practices are surprised to see is 30-50% higher than they expected.
How to use it
- Desired salary: what you want to actually take home, before personal taxes.
- Self-employment taxes: 15.3% is the baseline (Social Security + Medicare). Add income tax to get your real rate — most owners should use 25-35%.
- Overhead: rent, software, marketing, insurance, staff — as a percentage of salary. 20-35% is typical for solo practices.
- Billable hours: be honest. 30 hours a week of real billable time is a full schedule — the rest goes to admin, marketing, and gaps.
Frequently asked questions
What is a good hourly rate for a professional practice?
It depends entirely on your costs and market. A solo professional wanting $90,000 take-home with 25% overhead, 15% profit, and 30% taxes typically needs to charge $95-120/hour for 30 billable hours a week. Compare that to your market's rates — if they are lower, you either raise prices, cut overhead, or work more billable hours.
Should I charge more than my salary equivalent?
Yes — the rule of thumb is that your hourly rate must cover roughly three times your desired hourly take-home: one part for you, one for taxes and benefits, one for overhead and profit. This calculator shows the exact number instead of the shortcut.
How many hours can I really bill in a week?
For client-facing professionals, 25-35 billable hours a week is a full load. The rest of a 45-50 hour week goes to admin, marketing, continuing education, and unbooked gaps. Use your real average, not your ideal.
What if my market won't pay that rate?
Then the business model has to change, not the rate: cut overhead, raise prices gradually with existing clients, add productized services, or reduce the salary you need this year. Charging below your real cost is how practices slowly go broke.
Should I adjust my rate by state?
Yes. Overhead (rent, insurance, wages) varies significantly by state and metro area. Re-run the calculator with your local overhead numbers — the method is the same, the inputs change.
Methodology
Rate = desired salary ÷ (1 − tax%) × (1 + overhead%) × (1 + profit%) ÷ billable hours. The tax gross-up reflects that self-employment taxes come off the top; overhead and profit are added as percentages of the grossed-up salary. This is the standard "gross-up" method used by business consultants and the SBA's pricing guidance for service businesses.
Planning tool, not tax or financial advice. Consult your accountant for your specific situation.