Model an hourly revenue floor from owner pay, overhead, a user-entered annual reserve, billable capacity, and target operating margin.
A quick decision brief for this specific tool
Annual owner pay before personal income tax, business overhead, a user-estimated annual taxes/benefits/leave reserve, working weeks, billable hours per week, and target operating margin
Annual cost base, required-revenue scenario, billable capacity, and corresponding hourly, four-hour, and eight-hour revenue floors
Add the three annual cost targets, divide by one minus the operating-margin rate, then divide required revenue by entered billable capacity
Choose your path
Convert explicit annual cost, capacity, and operating-margin assumptions into a transparent revenue-per-billable-hour planning floor without inferring taxes or market price.
Separate desired owner pay from business costs and non-billable time.
Enter owner pay, overhead, a self-researched annual reserve, working weeks, and billable capacity.
Can reconcile the hourly result to annual cost and capacity without calling it take-home pay.
Compare capacity and operating-margin scenarios correctly.
Change billable hours and target margin while reviewing required revenue.
Understands margin is a share of revenue and is different from markup.
Avoid treating a calculator result as a quote or tax answer.
Review scope limits, then validate tax inputs and market evidence independently.
Uses the result as an internal floor assumption rather than a universal client rate.
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Owner pay before personal income tax, annual business overhead, and a user-entered annual reserve are added without guessing jurisdiction-specific taxes or benefits.
cost base = owner pay + overhead + annual reserveTarget margin is modeled as a share of revenue, not as markup on cost. A zero target margin makes required revenue equal the cost base.
required revenue = cost base ÷ (1 - margin)Billable hours per week are multiplied by working weeks per year. The required annual revenue is divided across that capacity, so the result changes transparently with either assumption.
hourly floor = required revenue ÷ (billable hours/week × working weeks/year)Updated: July 2026
A freelancer compares conservative and optimistic billable-hour assumptions before setting a revenue target.
An independent consultant keeps owner pay, overhead, and an annual tax/benefit/leave reserve visible as separate planning inputs.
A studio compares a zero-margin break-even scenario with a target operating-margin scenario, then validates the result against contracts and market evidence.
Include origination fees, PMI, and closing costs in your total cost comparison.
Long-term projections should account for inflation and consult current tax rules for your region.
Work backwards from an annual owner-pay target and explicit business assumptions. The result is a planning floor for revenue per billable hour—not a tax estimate, market rate, or promise of profit.