Effective hourly rate calculator

What was your effective hourly rate on this project?

Enter the project fee, the hours it took, and what it cost you. The number updates as you type. No account, no email.

hrs
/hr
Effective hourly rate
€40/hr
Quoted80/hr
Actual40/hr

You quoted €80/hr. It paid €40/hr.

The formula

Effective hourly rate is what a project paid per hour of your actual time, not the rate printed on the invoice. Take what you were paid, subtract anything you spent to deliver it, and divide by the hours it really took.

(project fee − direct costs) ÷ hours spent = effective hourly rate

A worked example

A €4,000 fixed fee that took 100 hours paid €40 an hour, not the €80 you had in mind when you wrote the proposal. That is the entire calculation. It does not adjust for how good the work was, how happy the client is, or how long ago you agreed the price. It only counts what actually cleared your hours.

What this number is actually for

Fixed fees hide the rate. A day rate makes the math obvious every time you invoice. A flat project fee makes it invisible until someone divides it out, which is exactly why studios that quote fixed fees are the ones least likely to know their real margin.

Scope creep is a rate problem before it is anything else. Two extra revision rounds do not change the fee. They do change the hours, and the hours are the number on the bottom of the fraction.

It is the fair way to compare clients. Revenue per client tells you who pays the most. Effective rate tells you who is worth the hours, which is a different ranking more often than people expect.

It only means what your time log means. Hours you never tracked do not count against the fee, so an undertracked project flatters its own rate. Log close to what actually happened, or the number describes your logging habits instead of your business.

FAQ

Effective hourly rate, answered.

Anything you spent specifically to deliver this project that you would not have spent otherwise: a paid font license, a subcontractor, stock assets, a tool bought for the job. Your rent, your laptop and your usual software subscriptions are overhead, not a cost of this one project, so leave them out here and count them in your regular business costs instead.

Every hour it actually took, billed or not. If you quoted 40 hours and it took 55, the fee paid for 55 hours of work, not 40. Leaving out the overrun hours is how a project ends up looking more profitable on paper than it was in practice.

There is no single number that fits every trade and country. The useful comparison is against your own quoted rate and your other projects, not a benchmark: an effective rate that lands well under what you meant to charge, on the same type of project, repeatedly, means the estimate or the scope needs to change.

Yes. Worklyn tracks time against each project and reconciles it with what was actually invoiced and paid, so the effective hourly rate sits on the project page and the client page as a live number, per project and per client, instead of a spreadsheet you build after the fact.

Worklyn calculates this for you

Worklyn tracks time against each project and reconciles it with what was actually invoiced and paid, so effective hourly rate sits on the project page and the client page as a live number, per project and per client, instead of a spreadsheet you rebuild after the fact.

Start free