Hourly Rate Calculator
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Freelancer Hourly Rate Calculator
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In this competitive world, we have to adapt ourselves to survive in every situation. Whether one is a beginner or an experienced person, one has to consider his worth before making commitments to any job or a company.
Some questions that always make their way into your mind are –
- Am I getting paid fairly?
- Do I need to charge more?
- If yes, then how much should I charge?
- Does the salary offered justify my expenses, time and efforts involved?
- But how do I know if I am getting underpaid?
If these are the questions that plague your mind every now and then, then you have come to the right platform where you will get the answers to all of your queries.
HOURLY RATE CALCULATOR
The hourly rate calculator is a user friendly tool designed especially to calculate hourly wages. It provides you a insight to choose your pay scale by giving a better understanding of how much their time is worth.
Be it a freelancer, service provider or any other professional, one has to know as to what price should be offered to them so that they don’t go through undercharging.
The hourly rate calculator helps you to rate your services to the clients so that you can get the appropriate income. It involves all kinds of costs, the expected profit you need and the number of hours you can bill.
To be successful in any profession, you should know your hourly rate which is a to financial planning.
BENEFITS OF USING HOURLY RATE CALCULATOR
Fair dealing – The hourly rate calculator helps you to calculate hourly wage based on your inputs like the expenses involved, thus assisting you to charge your services accordingly.
Improves bargaining skills – When you know your worth, you can confidently negotiate with clients to make them understand your worth of effort.
Budgeting – The hourly rate calculator helps you to prepare a more effective budget by giving you an overview of your earnings.
Better decision making skills – After having the knowledge of your hourly wage, you can choose your job with more efficiency with better future prospects.
It also helps to inform you whether the hourly wage you are getting is upto your standards. If not, then you can plan to maximize your profits by opting another approach.
Range of conversions – An hourly rate calculator helps you to convert salary into hourly wage, be it annual, monthly or weekly. It can help you to determine per hour payment without any difficulty.
Time saver – It saves a lot of time and effort by giving you the results in no time.
How to calculate an hourly rate?
If you want to calculate your hourly rate as per your desired salary, then you need to keep the following points in your mind :
- Annual Expenses All the business related expenses should be considered thoroughly before coming to certain conclusions, like
- Software subscriptions
- Office supplies
- Insurance
- Desired annual income
- Billable hours
- Decide on how much you want to earn after all expenditures.
- Market rate Before deciding how much you want to earn, keep an eye on others from similar field to know what they are charging. It would help you to settle on your price for your services.
- Unseen expenses If you are a freelancer, then your health issues, rent, holidays should also be inconsideration as you yourself are spending for providing the services. It should be ‘making money’ and not ‘losing money’ in the end.
- Taxes and benefits Taxes that need to be paid a long with the benefits like bonuses, health insurance, paid time off should also be considered.
Formula for calculating Hourly Rate
The formula to calculate hourly rate is as follows – Hourly Rate = (Annual income + Expenses) / Billable hours
- For example – Desired Annual Income = $ 70,000
- Annual Expenses = $ 20,000
- Billable Hours = 1,200 hours
Hourly Rate = ($70,000 + $20,000) /1, 200 = $75
It means that if you want to earn your desired annual income of $70,000, then you need to charge $75 per to cover all the expenses.
For Employees – Hourly Wage Calculator
For salaried employees, it is important to know the true value of their time.
For this, take your yearly salary and turns it into a per hour based on the hours you work in a year.
For example –
- Annual salary = $60,000
- Annualized hours of work = 2,090 hours
Hourly Rate = $60,000 ÷ 2,090 = $28.70
After knowing your hourly rate, you can determine whether you are being given appropriate amount to cover all your financial
requirements.
Common Errors –
While calculating hourly rate, one often tends to ignore minute details that can change the whole outcome
- Lack of knowledge of Market Price Before setting up your price, compare it with market price. As undercharging demotivates you, so will the overcharging repulses the clients. So adjust accordingly.
- Underestimating Expenses Most of the people do not consider the operating costs and the expenses for providing the services like subscriptions etc. It can lead to undercharging, thus only loss for the service providers.
- Inaccurate Overtime Rate One needs to know the type of overtime they are performing, like regular or emergency, and thus settle the overtime charges.
- Ignoring Non Billable hours Not every hour is billable. One should also include the time spent on administrative tasks as otherwise your income calculations wouldn’t include those hours spent.
FINAL WORDS
The Hourly Rate Calculator can be of great help when one needs to see the direction in which they are getting paid, whether they are underpaid or their financial requirements are fulfilled.
By knowing hourly wage, it becomes easier to choose among the
options of job offers which otherwise can be quite overwhelming when you find yourself comparing them. All of them may have some pros and cons. Without having any knowledge of hourly wage ( that includes other points like operating expenses that can be overseen by many if they are not aware of the calculation of hourly wage), it is easier to feel pressurized and may choose less profitable offer. It also offers s ope of improvement where they can to maximise their profit.