Hourly rate, ex indirect tax125.00/ hour
- Equivalent 7.6-hour day rate
- 950.00
- Monthly retainer
- 2,777.78
- 28% effective delivery margin
Educational only: Business decision support, not accounting, tax or legal advice.
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Update policy: Reviewed when formulas or official dependencies change.
Scope: Market-neutral small-business planning using your own assumptions.
What this planner helps you decide
Best for
Freelancers, consultants and service businesses setting or reviewing client prices.
Outputs
A sustainable hourly rate, day rate, project quote and monthly retainer benchmark.
Start here
Enter your real annual costs and working capacity, then compare lower and higher billable utilisation.
Use a different tool when: Do not use this to set a price for a target gross margin; use Target Margin & Pricing Planner for that decision. Use this tool to set a viable rate and project quote.
Decision pack · Step 1 of 5
Quote to Cash
Connect a viable service rate to a scoped quote, realised job margin, collection cost and short-term cash forecast.
- 1. Set the service rate
- 2. Build the project quote
- 3. Review realised margin
- 4. Price the collection delay
- 5. Forecast short-term cash
Current decision: What rate recovers capacity, overhead and the target return?
Next: Use the internal rate to compose the scoped project quote.Quote & capacity
Service Rate & Quote: a sustainable hourly rate
A sustainable hourly rate, day rate, project quote and monthly retainer benchmark.
Amounts use the same currency as your inputs. No currency conversion is performed.
Owner presets
Load an illustrative starting configuration for a common service model. These editable examples are not market-rate benchmarks.
Rate and capacity assumptions
Recover annual costs and profit within the hours you can realistically bill.
Your numbers stay in this browser
The annual amount the business must recover for your work, before business profit.
Include software, insurance, accounting, workspace and other recurring business costs.
Profit retained by the business after owner pay and overheads—not your personal salary.
Exclude planned leave, public holidays, training and unavailable weeks.
Include all working time, not only hours billed to clients.
The percentage of your working hours you can realistically bill to clients. Admin, sales and unpaid revisions reduce this percentage.
Enter the billable hours represented by one quoted day. This changes the day-rate conversion, not your annual capacity or hourly rate.
Project, retainer and indirect tax assumptionsUsed to convert the sustainable hourly rate into project and retainer planning outputs.
Estimated project delivery time.
Direct expenses added to this quote.
Allowance for scope uncertainty.
Capacity reserved for the client each month.
Allowance for availability and response obligations.
Editable tax scenario; confirm the treatment of your service.
Required hourly rate, ex indirect tax
The rate needed to recover the annual costs and profit target you entered.
PDF and CSV exports stay on this device. Clean page links contain no inputs.
Utilisation scenarios
See how the required rate changes when fewer or more working hours can be billed.
ScenarioResultDifference
Lower utilisation (65%)144.2319.23
Base utilisation (75%)125.00Baseline
Higher utilisation (85%)110.29-14.71
Save these results, change an input, then compare the updated figures with this baseline.
The baseline is temporary in this tab and is not added to shared scenario links or generated reports.
Calculation details
Your rate assumes that 75% of your 33.3 weekly working hours can be billed to clients across 48 working weeks, giving 1,200 billable hours/year.
View calculation detailsView formulas, inputs used and derived assumptions.
Formula
Hourly rate ex indirect tax
Annual billable hours
working weeks × hours/week × billable utilisation1,200 hours/yearDelivery cost recovery
(owner/labour cost + overheads) ÷ billable hours100/hour ex indirect taxRequired hourly rate
delivery cost/hour + annual profit target ÷ billable hours125/hour ex indirect taxResult125.00
per billable hour, excluding indirect tax.
Review the required-rate formula →Inputs used by these formula steps
- Annual billable hoursWorking Weeks
- 48
- Annual billable hoursHours Per Week
- 33.33
- Annual billable hoursUtilisation
- 0.75
- Delivery cost recoveryAnnual Owner Cost
- 90,000
- Delivery cost recoveryAnnual Overheads
- 30,000
- Delivery cost recoveryAnnual Billable Hours
- 1,200
- Required hourly rateDelivery Cost Hourly
- 100
- Required hourly rateAnnual Profit Target
- 30,000
- Required hourly rateAnnual Billable Hours
- 1,200
Day rate ex indirect tax
Required hourly rate
delivery cost/hour + annual profit target ÷ billable hours125/hour ex indirect taxRequired day rate
required hourly rate × billable hours per quoted day950/day ex indirect taxResult950.00
per entered quoted day, excluding indirect tax.
Review the day-rate formula →Inputs used by these formula steps
- Required hourly rateDelivery Cost Hourly
- 100
- Required hourly rateAnnual Profit Target
- 30,000
- Required hourly rateAnnual Billable Hours
- 1,200
- Required day rateHourly Rate
- 125
- Required day rateBillable Hours Per Day
- 7.6
Project quote ex indirect tax
Required hourly rate
delivery cost/hour + annual profit target ÷ billable hours125/hour ex indirect taxProject quote
(required rate × delivery hours + expenses) ÷ (1 − scope buffer)11,764.71 ex indirect taxResult11,764.71
per project, excluding indirect tax, including entered project expenses and scope buffer.
Review the project-quote formula →Inputs used by these formula steps
- Required hourly rateDelivery Cost Hourly
- 100
- Required hourly rateAnnual Profit Target
- 30,000
- Required hourly rateAnnual Billable Hours
- 1,200
- Project quoteHourly Rate
- 125
- Project quoteProject Hours
- 80
- Project quoteExpenses
- 0
- Project quoteScope Buffer
- 0.15
Effective project delivery margin
Project quote
(required rate × delivery hours + expenses) ÷ (1 − scope buffer)11,764.71 ex indirect taxEffective project delivery margin
(quote − project delivery cost) ÷ quote32%Result32%
Project quote less project delivery cost, divided by the ex-indirect tax project quote; project delivery cost already includes entered expenses.
Review the project-margin formula →Inputs used by these formula steps
- Project quoteHourly Rate
- 125
- Project quoteProject Hours
- 80
- Project quoteExpenses
- 0
- Project quoteScope Buffer
- 0.15
- Effective project delivery marginQuote
- 11,764.71
- Effective project delivery marginDelivery Cost
- 8,000
Annual billable capacity
Annual billable hours
working weeks × hours/week × billable utilisation1,200 hours/yearResult1200 hrs
Billable hours per year from the entered working time and utilisation. Displayed to the nearest whole hour for operational planning.
Review the billable-capacity formula →Inputs used by these formula steps
- Annual billable hoursWorking Weeks
- 48
- Annual billable hoursHours Per Week
- 33.33
- Annual billable hoursUtilisation
- 0.75
Monthly retainer ex indirect tax
Required hourly rate
delivery cost/hour + annual profit target ÷ billable hours125/hour ex indirect taxMonthly retainer
(required rate × reserved hours) ÷ (1 − availability buffer)2,777.78/month ex indirect taxResult2,777.78
per month, excluding indirect tax, for entered reserved hours and availability buffer.
Review the retainer formula →Inputs used by these formula steps
- Required hourly rateDelivery Cost Hourly
- 100
- Required hourly rateAnnual Profit Target
- 30,000
- Required hourly rateAnnual Billable Hours
- 1,200
- Monthly retainerHourly Rate
- 125
- Monthly retainerReserved Hours
- 20
- Monthly retainerAvailability Buffer
- 0.1
Effective retainer delivery margin
Monthly retainer
(required rate × reserved hours) ÷ (1 − availability buffer)2,777.78/month ex indirect taxEffective retainer delivery margin
(retainer − allocated delivery cost) ÷ retainer28%Result28%
Monthly retainer less allocated delivery cost, divided by the ex-indirect tax monthly retainer.
Review the retainer-margin formula →Inputs used by these formula steps
- Monthly retainerHourly Rate
- 125
- Monthly retainerReserved Hours
- 20
- Monthly retainerAvailability Buffer
- 0.1
- Effective retainer delivery marginRetainer
- 2,777.78
- Effective retainer delivery marginDelivery Cost
- 2,000
Inputs used — capacity
- Working weeks per year
- 48
- Available hours per week
- 33.3 hours
- Billable utilisation
- 75%
- Billable hours per quoted day
- 7.6 hours
Inputs used — financial
- Annual owner/labour cost
- 90,000
- Annual overheads
- 30,000
- Annual profit target
- 30,000
- indirect tax scenario rate
- 0%
Derived assumptions
- Annual billable capacity
- 1,200 hours
- Headline result treatment
- Ex indirect tax
- Display rounding
- Money 2 dp · hours 1 dp
These values update automatically when you change the scenario inputs.
Additional planning modes
Open the commercial model you need. These calculators stay separate from the primary rate result above.
Retainer scope and capacity tiers
Reserve monthly capacity, price an availability buffer and show overage and capacity remaining without creating a separate thin route.
- Retainer fee
- 4,444.44
- Expected revenue with overage
- 5,404.44
- Capacity remaining
- 56.0 h (70%)
Calculation details
View calculation detailsView the formulas and inputs used for these results.
Retainer fee
Retainer fee
(included hours × hourly rate) ÷ (1 − availability buffer)4,444.44Result4,444.44
per month, excluding indirect tax.
Review the retainer-tier formula →Inputs used by these formula steps
- Retainer feeIncluded Hours
- 20
- Retainer feeHourly Rate
- 200
- Retainer feeAvailability Buffer
- 0.1
Expected revenue with overage
Retainer fee
(included hours × hourly rate) ÷ (1 − availability buffer)4,444.44Expected overage revenue
expected overage hours × overage hourly rate960.00Expected revenue with overage
retainer fee + expected overage revenue5,404.44Result5,404.44
Monthly retainer plus entered expected overage, excluding indirect tax.
Review the retainer-overage formula →Inputs used by these formula steps
- Retainer feeIncluded Hours
- 20
- Retainer feeHourly Rate
- 200
- Retainer feeAvailability Buffer
- 0.1
- Expected overage revenueOverage Hours
- 4
- Expected overage revenueOverage Rate
- 240
- Expected revenue with overageRetainer Fee
- 4,444.44
- Expected revenue with overageOverage Revenue
- 960
Capacity remaining
Capacity remaining
monthly capacity − included hours − expected overage hours56.00 hResult56.0 h (70%)
Monthly hours remaining after included and expected overage hours; the percentage is the unused share of entered capacity.
Review the capacity-remaining formula →Inputs used by these formula steps
- Capacity remainingMonthly Capacity
- 80
- Capacity remainingIncluded Hours
- 20
- Capacity remainingOverage Hours
- 4
Inputs used
- Included hours
- 20 h
- Underlying hourly rate, ex indirect tax
- 200.00
- Availability buffer
- 10%
- Expected overage hours
- 4 h
- Overage rate, ex indirect tax
- 240.00
- Monthly capacity available
- 80 h
Loaded labour cost per productive hour
Use explicit employment on-cost, paid-time and productive-utilisation assumptions. No statutory rate or jurisdiction-specific employment rule is supplied.
- Annual loaded cost
- 88,000.00
- Productive hours
- 1603.2 h
- Loaded cost per productive hour
- 54.89
Calculation details
View calculation detailsView the formulas and inputs used for these results.
Annual loaded cost
Annual loaded cost
annual salary + annual employment on-cost + other annual on-costs88,000.00Result88,000.00
Annual salary and entered employment on-costs.
Review the loaded-cost formula →Inputs used by these formula steps
- Annual loaded costAnnual Salary
- 80,000
- Annual loaded costAnnual Employment On Cost
- 0
- Annual loaded costOther Annual On Costs
- 8,000
Productive hours
Productive hours
(paid hours − annual leave hours − other paid non-productive hours) × productive utilisation1603.20 hResult1603.2 h
Annual productive hours after entered paid non-productive time and utilisation.
Review the productive-hours formula →Inputs used by these formula steps
- Productive hoursPaid Hours
- 2,080
- Productive hoursAnnual Leave Hours
- 0
- Productive hoursOther Non Productive Hours
- 76
- Productive hoursProductive Utilisation
- 0.8
Loaded cost per productive hour
Annual loaded cost
annual salary + annual employment on-cost + other annual on-costs88,000.00Productive hours
(paid hours − annual leave hours − other paid non-productive hours) × productive utilisation1603.20 hLoaded cost per productive hour
annual loaded cost ÷ productive hours54.89Result54.89
per productive hour; verify employment obligations separately.
Review the productive-hour cost formula →Inputs used by these formula steps
- Annual loaded costAnnual Salary
- 80,000
- Annual loaded costAnnual Employment On Cost
- 0
- Annual loaded costOther Annual On Costs
- 8,000
- Productive hoursPaid Hours
- 2,080
- Productive hoursAnnual Leave Hours
- 0
- Productive hoursOther Non Productive Hours
- 76
- Productive hoursProductive Utilisation
- 0.8
- Loaded cost per productive hourAnnual Loaded Cost
- 88,000
- Loaded cost per productive hourProductive Hours
- 1,603.2
Inputs used
- Annual salary
- 80,000.00
- Employment on-cost rate
- 0%
- Other annual on-costs
- 8,000.00
- Ordinary hours per week
- 40 h/week
- Paid annual leave
- 0 weeks
- Other paid non-productive time
- 76 h/year
- Productive utilisation of available time
- 80%
Planning aid only. Enter the employment costs and paid-time rules that apply to your worker and jurisdiction; confirm classification and statutory obligations separately.
Rate basis converters
Convert in either direction using editable, market-neutral time assumptions.
Hourly ↔ day rate converter
125.00/hour · 1,000.00/day
Calculation details
View calculation detailsView the formulas and inputs used for these results.
Hourly rate
hourly-day-rate-converter
day rate = hourly rate × hours per day1,000Result125.00
Calculated only from the editable values in this owner module. Display formatting does not feed back into the calculation.
Owner methodology →Inputs used by these formula steps
- hourly-day-rate-converterRate Basis
- hour
- hourly-day-rate-converterRate
- 125
- hourly-day-rate-converterHours Per Day
- 8
Day rate
hourly-day-rate-converter
day rate = hourly rate × hours per day1,000Result1,000.00
Calculated only from the editable values in this owner module. Display formatting does not feed back into the calculation.
Owner methodology →Inputs used by these formula steps
- hourly-day-rate-converterRate Basis
- hour
- hourly-day-rate-converterRate
- 125
- hourly-day-rate-converterHours Per Day
- 8
Inputs used
- rateBasis
- hour
- rate
- 125
- hoursPerDay
- 8
Salary ↔ productive hourly cost
104,000.00/year · 65.00/productive hour
Calculation details
View calculation detailsView the formulas and inputs used for these results.
Annual cost
salary-hourly-converter
hourly cost = annual cost ÷ (hours/week × weeks × productive utilisation)65Result104,000.00
Calculated only from the editable values in this owner module. Display formatting does not feed back into the calculation.
Owner methodology →Inputs used by these formula steps
- salary-hourly-converterSalary Basis
- annual
- salary-hourly-converterSalary Amount
- 104,000
- salary-hourly-converterHours Per Week
- 40
- salary-hourly-converterWorking Weeks
- 50
- salary-hourly-converterProductive Percent
- 80
Productive hourly cost
salary-hourly-converter
hourly cost = annual cost ÷ (hours/week × weeks × productive utilisation)65Result65.00
Calculated only from the editable values in this owner module. Display formatting does not feed back into the calculation.
Owner methodology →Inputs used by these formula steps
- salary-hourly-converterSalary Basis
- annual
- salary-hourly-converterSalary Amount
- 104,000
- salary-hourly-converterHours Per Week
- 40
- salary-hourly-converterWorking Weeks
- 50
- salary-hourly-converterProductive Percent
- 80
Inputs used
- salaryBasis
- annual
- salaryAmount
- 104,000
- hoursPerWeek
- 40
- workingWeeks
- 50
- productivePercent
- 80
How to use this result
Treat the calculated rate as a sustainability benchmark, not necessarily the exact price shown to every client. Compare it with your market position, project risk and client value before sending a quote.
Set a minimum
Avoid accepting routine work below approximately 125.00/hour ex indirect tax unless another commercial benefit justifies it.
Build a quote
Multiply estimated delivery hours by your rate, then add scope risk, revisions and contingency.
Open Project Quote BuilderTest the assumptions
Compare lower billable utilisation or higher overheads before committing to a long-term price.
Adjust assumptions aboveOpen this calculator with preset values
This calculator supports documented, shareable scenario URLs. Compatible assistants and applications can construct links using the parameters below.
Scenario links contain only allowlisted numeric and closed-choice inputs shown in the URL; Margin101 excludes free text and identifying fields. Anyone you share the URL with can read those numbers, so do not include private or identifying data.
| Parameter | Meaning | Unit | Allowed values | Presence | Default |
|---|---|---|---|---|---|
| annualOverheads | Include software, insurance, accounting, workspace and other recurring business costs. | currency units/year | 0 to 10000000 | Required | 30000 |
| annualOwnerCost | The annual amount the business must recover for your work, before business profit. | currency units/year | 0 to 10000000 | Required | 90000 |
| annualProfitTarget | Profit retained by the business after owner pay and overheads—not your personal salary. | currency units/year | 0 to 10000000 | Required | 30000 |
| billableHoursPerDay | Enter the billable hours represented by one quoted day. This changes the day-rate conversion, not your annual capacity or hourly rate. | billable hours/quoted day | 1 to 24 | Required | 7.6 |
| billableUtilisation | The percentage of your working hours you can realistically bill to clients. Admin, sales and unpaid revisions reduce this percentage. | proportion of available working hours billable | 0.01 to 0.99 | Required | 0.75 |
| gstRate | Editable tax scenario; confirm the treatment of your service. | proportion of ex-tax service price charged as indirect tax | 0 to 1 | Required | 0 |
| hoursPerWeek | Include all working time, not only hours billed to clients. | hours/week | 1 to 168 | Required | 33.333333 |
| projectExpenses | Direct expenses added to this quote. | currency units/project | 0 to 10000000 | Required | 0 |
| projectHours | Estimated project delivery time. | hours/project | 0.25 to 100000 | Required | 80 |
| retainerBuffer | Allowance for availability and response obligations. | proportion of delivery cost added for availability obligations | 0 to 0.95 | Required | 0.1 |
| retainerHoursPerMonth | Capacity reserved for the client each month. | hours/client/month | 0.25 to 744 | Required | 20 |
| scopeBuffer | Allowance for scope uncertainty. | proportion of delivery cost added for scope uncertainty | 0 to 0.95 | Required | 0.15 |
| workingWeeks | Exclude planned leave, public holidays, training and unavailable weeks. | weeks/year | 1 to 52 | Required | 48 |
Decision checks
Act on the result
Set a defensible minimum rate and convert delivery hours into a quote with revisions, contingency and exclusions.
Stress-test the decision
Compare lower billable utilisation or higher overheads before committing to a long-term price or retainer.
When this estimate can be misleading
- The result is a planning rate, not a promise that the market will accept it.
- Leave, sales, admin and other non-billable time must be reflected in your capacity assumptions.
- Employment on-costs and income tax are not estimated.
- Treat the sustainable rate as a commercial benchmark, then adjust the client price for scope risk, positioning and value.
Educational estimate, not advice. See all assumptions & limitations →
Related reading
Guides to interpret the decision and its assumptions.
- Service Pricing and Quoting: From Capacity to Scope
Turn cost and sellable capacity into a service rate, then test scope, duration, delivery risk and commercial model.
Read guide - Hourly vs Project vs Retainer Pricing
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Read guide - Coaching Economics: 1:1, Group and Cohort Models
Compare coaching delivery models using price, preparation, delivery time, cohort size and capacity.
Read guide - How to Price Onboarding and Discovery Work
Define the discovery outcome, access, participants and stop point, then price that work as explicit scope.
Read guide - Direct, Indirect, Variable and Fixed Costs for Decisions
Classify traceability and cost behaviour separately against a named object, activity driver, period and relevant range.
Read guide - Fully Loaded Labour Cost: What Belongs in the Rate?
Bridge user-entered annual pay, employer costs, non-delivery time and overhead to productive hours without global statutory defaults.
Read guide - Billable Rate vs Take-Home Income
Separate customer-facing business revenue from delivery cost, overhead, business recovery, owner distributions and personal tax.
Read guide
Frequently asked questions
How do I set a viable rate and project quote?
Set a defensible minimum rate and convert delivery hours into a quote with revisions, contingency and exclusions.
Which planning assumptions should I stress-test?
Compare a plausible alternative scenario and verify the decision-critical assumption that changes the plan most.