Effective Bill Rate Calculator
Revenue per hour worked, not just per hour billed.
What this calculator does
Two divisions of the figures entered, shown side by side so the gap between headline and effective rate is explicit.
Inputs and what they mean
- Currency
- — Amounts are shown in the currency you pick. No exchange rate is applied..
- Revenue billed
- — number value.
- Total hours worked
- — number value.
- Of which billable
- — number value.
How to use it
- Enter your own figures — the calculator never fills in a rate, price or benchmark for you.
- Press Calculate to see the result.
- Read the formula, variables, assumptions and source below the result before you rely on it.
Formula
Effective rate = Revenue billed ÷ Total hours worked; Rate per billable hour = Revenue billed ÷ Billable hours
Worked example
$180,000 billed over 1,800 hours worked
Separates the headline rate from the rate earned per hour worked.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
Limitations and assumptions
Results depend entirely on the figures you enter and are rounded for display. They are for general information and education, not professional advice.
Reference: IMA — Statements on Management Accounting — measuring the cost of capacity
Last reviewed:
Common questions
Formula, source and verification
Revenue is divided by hours worked, so non-billable time is visible in the rate.
The question it answers: What do we earn per hour worked, not just per hour billed?
The formula
Effective rate = Revenue billed ÷ Total hours worked; Rate per billable hour = Revenue billed ÷ Billable hours
- R — Revenue billed
- (currency). Revenue invoiced for the period.
- Hw — Total hours worked
- (h). All hours worked, billable or not.
- Hb — Billable hours
- (h). Hours charged to clients.
Units: Currency per hour; hours; percentage.
What kind of calculation this is
Deterministic formula. The same inputs always give the same answer. The maths is fixed and does not depend on judgement.
Method
Two divisions of the figures entered, shown side by side so the gap between headline and effective rate is explicit.
Assumptions built into the result
- Mathematical: Revenue and hours cover the same period.
Figures this calculator will never guess for you
- No utilisation assumption is applied to fill in missing hours.
Limitations
- Uses billed revenue, so unbilled or uncollected work is not reflected.
Source and version
- Standard or reference
- Revenue per hour worked (Institute of Management Accountants, Statements on Management Accounting — measuring the cost of capacity (resource use versus revenue).)
- Published source
- IMA — Statements on Management Accounting
- Formula version
- Version 1
- Verification
- Reviewed against the cited source on
- How much weight the source carries
- Standards or government
- Applies to
- Currency
- Amounts stay in the currency you choose; no exchange rate is applied.
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