Everhour turns billable time and expenses into invoices, but your solo rate starts with a realistic annual cost base.
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A solopreneur hourly rate answers one practical question: how much should you charge per billable hour to cover your income target, business expenses, self-funded benefits, and tax reserve. It is a pricing floor, not a promise that every client will accept the rate or that every hour in your week can be sold.
The calculation matters when you quote retainers, scope fixed-fee projects, compare client work, or decide whether a lower-rate engagement still supports the business. U.S. solopreneurs often mix project, value-based, and hourly pricing, so the hourly result also works as a check on the implied rate inside a flat project fee.
The formula is `(target income + business expenses + benefits substitute + tax gross-up) ÷ annual billable hours`. Business expenses include ordinary and necessary costs such as software, equipment, insurance, marketing, accounting, payment fees, subcontractors, and workspace costs. Benefits substitute covers items an employer would often contribute to, such as health coverage, retirement, paid time off, and other personal protections.
For example, a solopreneur targeting $91,000 in take-home income adds $22,000 in business expenses, $17,000 for self-funded benefits, and $26,000 for tax reserves. The annual cost base is $156,000. If 1,300 hours are realistically billable during the year, the required hourly rate is $120.00.
The 2,080-hour full-time baseline is a paid-hours benchmark, not a solo billable-hours denominator. BLS OEWS annual wage estimates use 2,080 hours for year-round full-time work, but a solopreneur spends part of the week on proposals, admin, accounting, client calls, marketing, learning, and unpaid project cleanup. Those hours still shape the rate because they reduce sellable capacity.
FreshBooks examples place solo billable capacity around 1,242 to 1,440 hours per year after non-billable work and time away. A solopreneur who bills 27 hours per week over 46 working weeks lands at 1,242 hours. Another who bills 6 hours per day, 5 days per week, over 48 working weeks lands at 1,440 hours.
A U.S. sole proprietor or independent contractor generally reports business profit or loss on Schedule C and uses Schedule SE to calculate Social Security and Medicare taxes on self-employment income. For 2026 estimated tax, net self-employment profit is multiplied by 92.35%; that amount is subject to 12.4% Social Security up to the $184,500 wage base plus 2.9% Medicare.
Higher-income solopreneurs also need to watch Additional Medicare Tax. The 0.9% layer applies to self-employment income above $200,000 for single filers and $250,000 for married filing jointly. Sole proprietors generally make quarterly estimated tax payments when they expect to owe at least $1,000, and estimated tax covers both income tax and self-employment tax.
A one-off calculator is enough when you need a pricing floor for a proposal, a quick check on a new client rate, or a back-out from a fixed project fee. It gives you a clean number before negotiation: annual cost base divided by realistic annual billable hours. Save the assumptions because the rate changes when expenses, taxes, benefits, or billable capacity change.
A managed workflow becomes necessary when you need to separate billable and non-billable time, attach expenses to client work, and turn approved time into invoices. Everhour Billing & Invoicing converts tracked billable time and expenses into invoices, excludes non-billable tasks, applies rates, and exports invoices to QuickBooks Online, Xero, or FreshBooks.
This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.
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A solopreneur hourly rate should include target income, ordinary and necessary business expenses, self-funded benefits, and tax reserves before division by billable hours. Common expenses include software, insurance, marketing, accounting, equipment, workspace, payment processing, and professional services. Personal spending does not become a business cost unless it qualifies as a deductible business expense.
Annual billable hours reflect the hours clients can actually buy. A solopreneur also spends time on proposals, bookkeeping, marketing, scheduling, client communication, and unpaid business development. Using total working hours understates the rate because it treats non-billable work as if it produces client revenue.
The 2,080-hour baseline is useful for comparing full-time paid employment, but it is too broad for solo pricing. BLS OEWS annual wage estimates use 2,080 hours as a year-round full-time benchmark. A solopreneur rate should use realistic annual billable hours because admin, prospecting, sick time, holidays, and vacation reduce client-billable capacity.
A U.S. solopreneur should include a tax reserve in the rate calculation. Federal self-employment tax is 15.3%, made up of 12.4% Social Security and 2.9% Medicare, with Social Security subject to the 2026 wage base. Income tax and quarterly estimated tax obligations also affect the reserve.
A solopreneur can use the hourly rate as a floor inside fixed-fee pricing. Divide the project fee by the estimated billable hours to see the implied hourly rate. A $4,800 project that takes 60 billable hours implies $80 per hour, before comparing it with your sustainable rate.
Everhour Billing & Invoicing turns tracked billable time and expenses into invoices, calculates invoice amounts from rates, and excludes non-billable tasks. Invoices can be exported to QuickBooks Online, Xero, or FreshBooks, with status, invoice number, issue date, and amount synced back to Everhour.
Track billable time, separate non-billable work, and generate client invoices from approved entries. Everhour keeps rate math connected to invoicing.
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