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A U.S. hourly-rate calculation answers one question: the rate per billable hour that covers your target income, ordinary business costs, self-funded benefits, and tax reserve. On Android, the math is unchanged; the practical advantage is checking the rate while invoices, time logs, or client notes are open in another app.
The result matters before you quote a client, accept a retainer, compare a project fee to hourly effort, or decide whether a public profile rate matches your actual costs. U.S. freelancers commonly use project pricing as well as hourly pricing, so the hourly figure also acts as a floor for fixed-fee work.
Start with the money the business must produce during the year. Use the formula: target income plus overhead plus benefits substitute plus tax reserve, divided by realistic billable hours. Overhead includes ordinary and necessary business expenses such as software, equipment, insurance, professional services, and payment fees. Benefits substitute covers items an employer would often help fund, such as health coverage or retirement contributions.
For example, a freelancer who wants $78,000 in income, expects $14,400 in overhead, sets aside $9,600 for self-funded benefits, and reserves $21,000 for taxes needs $123,000 before profit is considered. With 1,640 realistic billable hours, the required rate is $75.00 per billable hour. That rate covers only the stated assumptions, so each input needs a defensible number.
Billable hours are hours actually billed to clients, not total working hours. Proposals, sales calls, bookkeeping, training, admin, revisions outside scope, and unpaid client communication reduce the denominator. A full-time schedule can contain 2,080 paid hours in employment, but a freelancer rarely invoices every working hour.
The common mistake is dividing by available work hours instead of realistic billable hours. If the $123,000 annual cost base is divided by 2,080 hours, the rate falls to $59.13. That quote leaves $15.87 unrecovered on every billable hour compared with the 1,640-hour calculation, and the shortfall reaches $26,026.80 across 1,640 billed 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. Self-employed individuals generally file an annual income tax return and pay estimated taxes quarterly because no employer withholds income tax, Social Security, or Medicare tax from contractor pay.
For 2026 estimated tax, net self-employment profit is multiplied by 92.35%; the resulting amount is subject to 12.4% Social Security up to the $184,500 wage base plus 2.9% Medicare. Additional Medicare Tax applies above $200,000 for single, head of household, and qualifying surviving spouse filers, $250,000 for married filing jointly, and $125,000 for married filing separately.
A one-off calculator is enough when you need a quote floor, a sanity check on a project fee, or a quick Android calculation before replying to a client. It gives a clean hourly answer as long as the annual inputs and billable-hour estimate are current.
A managed workflow matters once actual hours, budgets, invoices, and profitability need a record. Everhour Reporting turns logged time, costs, budgets, and project data into customizable reports with columns, grouping, filters, exports, and scheduled email delivery, so rate assumptions can be compared with real project outcomes.
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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The calculation does not change on Android. Use the same U.S. formula: target income plus overhead plus benefits substitute plus tax reserve, divided by realistic billable hours. Android mainly changes the workflow, since you can calculate from a phone while checking time logs, client messages, receipts, or a spreadsheet in another app.
Use realistic billable hours. Total work hours include admin, sales, learning, internal operations, and unpaid client communication. Those hours still require funding, but clients do not pay for each one directly. A rate based on total work hours usually underprices the work because it spreads annual costs across hours that never become invoices.
The reserve should account for federal self-employment tax and income-tax exposure based on the worker's situation. A U.S. sole proprietor or independent contractor generally uses Schedule C for business profit or loss and Schedule SE for Social Security and Medicare taxes. Self-employed individuals generally pay estimated taxes quarterly because contractor pay has no employer withholding.
An hourly rate can set the floor for project pricing. Estimate the hours, multiply by the required hourly rate, then adjust for scope risk, urgency, client value, and revision limits. A 30-hour project at $75.00 per hour needs at least $2,250 before any fixed-fee risk premium.
Saved or copied numbers can become stale when overhead, benefits, or billable-hour assumptions change. Use the current year's costs, current tax reserve, and a fresh billable-hour estimate before quoting. Browser autofill and repeated notes are useful for speed, but they should not replace a current review of each input.
Everhour Reporting provides customizable reports with 45+ columns, metadata filters, grouping, date ranges, exports, and scheduled email delivery. A freelancer or team can compare billable time, labor costs, revenue, profit, invoice status, and budget metrics against the hourly rate used when the work was quoted.
Everhour supports billable and non-billable time, project billing status, project rates, member rates, and custom task rates. Admins can build reports with billable time, non-billable time, billable amount, and cost, so client billing stays tied to the chosen rate structure.
Set the hourly rate, then compare it with real logged work. Everhour Reporting connects time, costs, budgets, exports, and scheduled reports, giving each quote a measurable profitability trail.
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