Skip to main content
/
billable hours calculatorutilization rate freelancerbillable vs non-billableeffective hourly ratefreelance overhead costtime tracker analysisfreelancer rate gapsolo freelancer benchmark
//// Business · Freelance

Billable vs Non-Billable Time Analyzer

Discover your true effective hourly rate vs your stated rate. See the annual cost of overhead and what rate you need to hit your income target.

Corp Tax Rate21%
SE Threshold$400
FICA Cap 2024$168,600

Hours & Rate

Non-Billable Time Breakdown

100% total

Where does your non-billable time (15 hrs/wk) go?

Admin / Invoicing: 4.5 hrs/wk
Marketing: 3.8 hrs/wk
Networking: 2.3 hrs/wk
Prof. Development: 3.0 hrs/wk
Unbilled Revisions: 1.5 hrs/wk
Utilization rate
62.5%
Optimal
Effective hourly rate
$62.50
vs $100/hr stated
Annual billable income
$125,000
at current utilization
Annual hidden cost
$75,000
non-billable time at your rate

Optimal — 62.5% billable utilization

60-79% is the healthy zone for solo freelancers. Strong revenue without sacrificing growth or recovery time. Industry benchmark target.

1

Total annual working hours

annualHours = totalHoursPerWeek × 50 weeks

= 40 hrs/wk × 50

= 2,000 hrs/year

2

Annual billable income (at stated rate)

annualIncome = billableHours × 50 × hourlyRate

= 25 × 50 × $100/hr

= $125,000

3

Billable utilization rate

utilization = billableHoursPerWeek / totalHoursPerWeek

= 25 / 40

= 62.5%

Healthy solo freelancer benchmark: 60-70%. Below 50% = urgent action needed. Above 80% = burnout risk.

4

True effective hourly rate

effectiveRate = weeklyBillableIncome / totalHoursWorked

= $2,500/wk ÷ 40 hrs

= $62.50/hr actual (vs $100/hr stated)

This is what you earn per hour of your actual time — not just the hours you invoice. Every non-billable hour lowers this number.

5

Annual hidden cost of non-billable time

hiddenCost = nonBillableHours × 50 × hourlyRate

= 15 hrs/wk × 50 × $100/hr

= $75,000 per year in time not billed

Opportunity cost of overhead at your stated rate. This is what non-billable work costs you in forgone revenue.

6

Rate needed to hit income target

rateNeeded = incomeTarget / (billableHours × 50)

= $100,000 / (25 × 50)

= $80.00/hr — current rate is sufficient

Key insight

Your stated rate is what you charge per billable hour. Your effective rate is what you actually earn per hour of your life. The gap between them is your overhead tax — the cost of running a freelance business.

Use this result in →

📋Freelance Contract Value📅Quarterly Tax Planner📊Freelance Pipeline Value

#ShowYourWork

You might also like

📦

Amazon FBA vs FBM Calculator

Compare Fulfillment by Amazon (FBA) vs self-shipping (FBM) for any product. See size tier, FBA fees, and annual profit difference to find the most profitable fulfillment method.

Try it →

📈

Investment Fee Calculator

See how expense ratios and advisor fees compound to erode your portfolio over time.

Try it →

📈

Profit Margin Calculator

See your full profit waterfall — gross, operating, and net margin — with a freelance/small-business rating and sensitivity analysis. Know if you're struggling, viable, healthy, or strong before your next client negotiation.

Try it →