Bill Rate Calculator
Work out a sustainable hourly bill rate for freelancers: rate = (target income + overhead) x (1 + profit %) / billable hours per year.
Input Data
Results
At a glance:Bill rate is the hourly fee a freelancer/consultant charges to reach a target income, cover overhead and keep a profit. rate = (target income + overhead) x (1 + profit %) / billable hours. At target 600k, overhead 200k, profit 20%, 1,500 billable hours: (800k x 1.2)/1,500 = HK$640/h. Beginners who divide income by total hours (e.g. 2,080) under-price, ignoring non-billable time, overhead and profit. WARNING: Also benchmark against market rates and your own competitiveness.
Formula
Bill rate = (target annual income + annual overhead) x (1 + profit %) / billable hours per year.
$$\text{Bill Rate} = \dfrac{(I + O)\times(1 + m)}{H_{\text{billable}}}$$How to Use
- Enter your target annual income and annual overhead.
- Enter billable hours per year and your target profit margin.
- View the hourly bill rate.
FAQ
How is the bill rate calculated — why not income / total hours?
rate = (target income + overhead) x (1 + profit %) / billable hours. Dividing income by total hours under-prices for three reasons: (1) not all hours are billable (pitching, admin, training take a large share); (2) you bear overhead (software, rent, insurance); (3) you need a profit buffer for risk and reinvestment. The correct rate covers all three over truly billable hours.
What billable hours and overhead should I use?
Billable hours = total hours worked minus non-billable time; for many freelancers that is about 60-80% of total. Be honest — over-estimating inflates the rate too low. Overhead includes software/licences, workspace, insurance, marketing, accounting, training and commuting. Underestimating either makes the rate unable to sustain the business; be conservative.
Do I just charge this rate?
Treat it as your financial floor and starting point. Also weigh market rates, your experience and positioning, client/project type, and pricing model (hourly vs fixed-fee vs value-based). Review and adjust periodically. This tool estimates only; it is not a pricing guarantee.
Do the self-employed pay tax in Hong Kong — is tax in the rate?
In Hong Kong, the self-employed pay Profits Tax on business profits and must file and keep records. This calculator uses a pre-tax target income and does not add tax on top; either treat tax as part of your target income or reserve for it separately. You also typically arrange your own MPF contributions. Tax and structure vary — follow the Inland Revenue Department and consult a professional.
Why add profit separately instead of into target income?
Target income is the 'salary' you pay yourself; profit is the return to the business as owner (buffer, reinvestment, growth). Separating them keeps the structure transparent and makes it easier to see which part to adjust when reviewing pricing.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.