Articles for service business owners


5 steps to calculating your hourly rate

25th August 2014

Having an hourly labour charge places an actual price on your time.

An hourly rate will make working out what to charge for your labour a much easier task…

But how do you know what to charge per hour?

Here’s an easy way to work out how much you should be charging per hour:

  1. Write down the annual salary you want/need to earn. That’s your desired salary.
  2. Minus the number of holiday weeks you want each year from 52. That’s the number of weeks you’ll work each year.
  3. Divide your desired salary by the number of weeks you can work. That’s your weekly earnings target.
  4. How many hours do you want to work each week? Divide your weekly earnings target by the number of hours you want to work.
  5. That’s your hourly rate. Write it down and keep it in mind… Always aim for it!

When pricing new work, multiply your hourly rate by the estimated number of hours you estimate it’ll take to complete the work.

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About the author

Adam Austin is the CEO & Co-founder of - The easy way for service businesses to save hours on admin and paperwork.

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