Whether you’re a freelancer or an agency principal, setting your firm’s target hourly rate is a crucial decision. While I would advise my clients not to bill by the hour, setting a target rate is essential for estimating projects and evaluating your profitability.
Your target rate must take several things into consideration. Most importantly your overhead, and your unutilized hours. When you do factor in overhead and unbillable time you might be surprised to discover what your actual (or effective) hourly rate really is.
Well wonder no more! Use these simple calculators I put together to find out what your rate is, or what it should be.
The freelance hourly rate calculator helps you know what your rate needs to be in order to meet your financial goals. It also compares your actual effective rate with what you might otherwise be paid if you were to go to work at another firm.
The design firm health calculator tells you what your effective hourly rate is and compares it to what it should be. It also calculates your actual utilization (the number of hours you actually get paid for compared to the overall hours your whole agency uses each year).
WARNING: Using these calculators may reveal flaws in your assumptions about your current profitability! But it’s better to find out so you cab fix the problems, then to just go on under performing.