Effective hourly rate equals revenue minus direct costs divided by total hours. Include sales, communication, revisions, production, administration and follow-up.
Effective hourly rate worksheet
Calculate contribution per hour from entered revenue, costs and total time.
Before tax and unentered overhead.
The short answer
Effective hourly rate equals revenue minus direct costs divided by total hours. Include sales, communication, revisions, production, administration and follow-up.
Use the guidance below as a starting framework, then adapt it to your audience, skills, location and available time.
What matters most
Focus on the variables that change the decision instead of copying a tactic without its context.
- Gross revenue
- Direct project costs
- Sales and proposal time
- Production and editing
- Revisions
- Administration and payment collection
Common mistakes to avoid
Most avoidable problems come from unclear positioning, unrealistic expectations or changing too many variables at once.
- Counting only camera time
- Ignoring failed pitches
- No equipment or contractor cost
- Using revenue instead of contribution
- Comparing one exceptional project to a salary
A practical way to start
Begin with a small, measurable version and use real audience behavior to decide what to improve.
- Track time for one month
- Allocate sales time reasonably
- Calculate by revenue stream
- Raise price or reduce scope where needed
Your next steps
- Step 1
Track time for one month
- Step 2
Allocate sales time reasonably
- Step 3
Calculate by revenue stream
- Step 4
Raise price or reduce scope where needed
Frequently asked questions
Should unpaid sales time count?
Yes when evaluating whether a revenue stream is sustainable.
What hourly rate is good?
It depends on costs, taxes, benefits, risk, market and personal goals. Compare like with like.
Can products have an hourly rate?
Yes over a chosen period by dividing contribution by creation, support and marketing time.