Billable hourly rate ESTIMATE
The hourly price that covers the pay you want and the overhead you typed, spread over hours you can actually bill.
Result ESTIMATE
Billable hours are not hours worked
The rate is (target pay + overhead) ÷ billable hours. $80,000 plus $20,000 of overhead, spread over 1,000 billable hours, is $100 an hour. A 40-hour week for 48 weeks is 1,920 hours at the desk. If only half of those hours are invoiced, you have about 960 billable hours, not 1,920. Using the larger number produces a rate that misses the target as soon as you do unpaid work.
This is not the markup calculator, which starts from the cost of a product. It is not the overtime calculator, which prices an employee’s extra hours under the federal wage rule. And it is not a statement of what clients in your city pay. If the resulting rate is higher than the work will bear, the levers are the pay target, the overhead, or the hours you can sell. The formula will not negotiate.
Tax sits outside the rate
The pay box is the cash you hope to keep available. It does not compute self-employment tax or income tax. If you need $80,000 after those taxes, the target has to be higher, and that higher number is something you estimate with a preparer, not something this page invents. Overhead should match accounts you can point to on the profit and loss, not a round guess you never reconcile.