Calculator
Example Data Table
| Scenario | Rate | Billable hrs/week | Non-billable hrs/week | Fixed costs/month | Tax % | Fees % | Discount % | Write-off % |
|---|---|---|---|---|---|---|---|---|
| Starter | $45 | 20 | 18 | $250 | 18 | 3 | 5 | 7 |
| Balanced | $60 | 25 | 15 | $350 | 20 | 3 | 5 | 5 |
| Premium | $95 | 28 | 12 | $600 | 22 | 2.5 | 3 | 3 |
Formula Used
- Billable hours/month = billable_hours_week × weeks_per_month
- Effective billable hours = billable_hours/month × (1 − writeoff%)
- Gross revenue = rate × effective_billable_hours × (1 − discount%)
- Utilization = billable_hours/month ÷ total_work_hours/month
- Processing fees = gross_revenue × fee%
- Total costs = fixed_costs + variable_costs + fees + tax
- Net profit = gross_revenue − fees − costs − tax
- ROI = net_profit ÷ total_costs
How to Use This Calculator
- Enter your billed rate and realistic weekly hours.
- Add fixed monthly costs and per-hour variable costs.
- Set discount and write-off percentages from past projects.
- Click Calculate to see net profit and hourly ROI.
- Use the target rate to plan pricing and workload.
- Export your results as CSV or PDF for clients or budgeting.
Turn utilization into revenue density
Your calendar is an asset, not a diary. When billable hours shrink, the same fixed costs consume a larger share of revenue. Track utilization as billable hours divided by total working hours, then compare hourly profit per total hour to spot weak weeks. Small improvements, like batching admin tasks, automating invoices, or templating proposals, often raise utilization without increasing total workload. Use revenue per total hour to compare service mixes and pricing models.
Set defensible price floors
A break-even rate protects you from “busy but broke” months. This calculator estimates the hourly rate where net profit reaches zero after fees, costs, and taxes. Use that figure as a non‑negotiable floor, then add a buffer for downtime, late payments, and sales cycles. Pair the floor with a minimum project size so short jobs still cover overhead. It also supports cleaner negotiation boundaries with confidence.
Control discounts and write-offs
Discounts and write-offs behave like silent rate cuts. A 10% discount on an already constrained schedule reduces revenue immediately, while write-offs reduce the billable hours you can actually invoice. Track both separately: discounts reflect pricing decisions; write-offs reflect execution, scope, and client management. Improve ROI by tightening change control, defining acceptance criteria, and setting revision limits. Review write-offs monthly to find recurring friction points. Log each adjustment so future quotes stay realistic.
Engineer your cost structure
Separate fixed costs (subscriptions, insurance, workspace) from variable costs (cloud usage, subcontractors, paid assets). Fixed costs are best attacked by consolidation and annual commitments; variable costs respond to process and tooling choices. When variable cost per billable hour rises, “high rate” work may still underperform. Use the per-hour view to identify which services deserve expansion, and which require a rate premium. Fees often creep.
Plan capacity with targets
Monthly net income targets are more actionable than yearly goals. Enter a target and safety buffer to see the required rate under your current time mix. If the required rate feels unrealistic, adjust two levers: increase billable hours through better utilization, or reduce non-billable hours by systemizing lead generation. Re-run scenarios with conservative hours to stress-test your plan before committing to new retainers.
FAQs
Why is hourly profit per total hour important?
It shows how your entire workweek performs, including admin time. If it is low, you may be over-investing in non-billable tasks or underpricing, even when billable hours look strong.
How should I estimate write-off percentage?
Review recent projects and divide unbilled effort by total billable effort logged. Include revisions, scope creep, and small fixes. Start conservative, then refine monthly as your delivery process becomes more consistent.
Does the calculator apply tax to revenue or profit?
It applies the tax rate to positive profit only. If profit is negative, estimated tax is set to zero. Use this as planning support and adjust the tax rate to match your real-world situation.
What if my target hourly rate looks too high?
Reduce non-billable hours, increase utilization, or raise package value so you can charge more. You can also lower fixed costs or reduce variable costs per billable hour. Re-test scenarios with realistic hours and buffers.
How do payment fees affect ROI?
Fees reduce revenue before costs and taxes are considered, so they compress profit quickly. If you use marketplaces or multiple processors, track average fees carefully and consider pricing them into your rate or minimum project size.
Why can ROI be blank or negative?
ROI is computed as net profit divided by total costs. If total costs are zero, ROI is not defined. If net profit is negative, ROI becomes negative, signaling that current pricing or time allocation is unsustainable.