Quick answer
Set target income/expenses/tax, then divide by the hours you can actually bill each year. Benchmark rates with multiple sources: job salaries/platforms/peers/closed deals.
Why it matters
The denominator is billable hours, not 40 hours x 52 weeks.
Platform prices may include fees.
Step by step
- Set a target annual income (keep pre/post-tax consistent).
- Add business costs/tax/insurance/gaps/margin.
- Calculate real billable hours per year, then divide to get the floor hourly rate.
- Calibrate with market/peer/closed-deal data; don't reverse-engineer a low price.
- State scope/payment/revision limits/rush fees in the quote.
Common mistakes
- Assuming 40 hours x 52 weeks are billable.
- Omitting tax/software/insurance/gaps/bad debt.
- Copying a competitor's low price without covering costs.
- Letting scope creep go unpaid.
Checklist
- Target income/costs/tax/margin confirmed.
- Billable hours reduced for gaps/admin/sales.
- Hourly/day/project rates use consistent assumptions.
- Market rate cross-checked.
- Quote includes scope/payment/revisions/rush terms.
Key facts
- Platform prices may include fees.
- Asking rates aren't closed rates.
FAQ
How do I calculate Rate benchmark?
Set target income/expenses/tax, then divide by the hours you can actually bill each year. Benchmark rates with multiple sources: job salaries/platforms/peers/closed deals.
How long does it take?
Usually 1-3 minutes; for intermittent issues, run 30 seconds and retest elsewhere.
Is data uploaded?
Runs locally and does not upload video/audio; extensions may still read the page.
Source: BLS