Craft Hourly Rate Calculator

The hourly rate a maker needs to charge, from a target income, the hours worked and the share of them that is billable.

A rate that pays for the making hours alone is a rate that pays for half the job. This calculator starts from the income you want, the weeks you will work and the hours a week you can give it, then removes the share of that time which goes on admin, sourcing, photographing and packing rather than billable work, and arrives at the hourly rate the remaining hours have to carry. The gap between that figure and the arithmetic over all the working hours is the single most useful number a sole trader can know.

At a glance

What you enter: Income you want to take out, Business costs the work must cover, Weeks you will actually work, Hours a week you can give it, Share of those hours that is billable, Hours in a working day, The rate you would like to charge
What you get: Hourly rate you need to charge, Day rate at that hourly rate, Hours you will work in a year, Billable hours in a year, Hours that are not billable, Rate if every hour were billable, How much the billable share raises the rate, Income you need per working week, Billable hours in a week, Income per working day, Billable share needed at the rate you want, Extra billable hours the lower rate would need, Shortfall against the income you want, Income the calculated rate produces
Formula shown: Yes, every step, right below your results.
Cost and privacy: Free, no account needed, and nothing you type is stored.

See worked examples ↓ Read the FAQ ↓ Share this calculator ↓

Income you want to take out

The amount that reaches you, before tax, over a year.

Business costs the work must cover

Insurance, tools, software, the website, the accountant, the workshop share. Added to the income before the division.

Weeks you will actually work weeks

Fifty two minus holidays, illness and the quiet weeks. Forty six is a fair figure for a sole trader.

Hours a week you can give it h

All the hours, billable and not.

Share of those hours that is billable %

Most sole traders find 50 to 70 percent. Measure it with a timesheet for two ordinary weeks rather than guessing.

Hours in a working day h

Used for the day rate.

The rate you would like to charge

Optional. Used to work out how much of your time would have to be billable for that rate to produce the income.

Reset

Results are estimates for general information only, always verify with a professional or official source before acting on them.

How to use the Craft Hourly Rate Calculator

1 Enter Income you want to take out, The amount that reaches you, before tax, over a year.
2 Enter Business costs the work must cover, Insurance, tools, software, the website, the accountant, the workshop share. Added to the income before the division.
3 Enter Weeks you will actually work (weeks), Fifty two minus holidays, illness and the quiet weeks. Forty six is a fair figure for a sole trader.
4 Enter Hours a week you can give it (h), All the hours, billable and not.
5 Enter Share of those hours that is billable (%), Most sole traders find 50 to 70 percent. Measure it with a timesheet for two ordinary weeks rather than guessing.
6 Enter Hours in a working day (h), Used for the day rate.
7 Enter The rate you would like to charge, Optional. Used to work out how much of your time would have to be billable for that rate to produce the income.
8 Press Calculate. You get Hourly rate you need to charge, Day rate at that hourly rate, Hours you will work in a year, Billable hours in a year, Hours that are not billable, Rate if every hour were billable, How much the billable share raises the rate, Income you need per working week, Billable hours in a week, Income per working day, Billable share needed at the rate you want, Extra billable hours the lower rate would need, Shortfall against the income you want, Income the calculated rate produces, and every intermediate step stays visible under "How is this calculated?"
9 Change one number at a time to see what moves the result, that is usually the most useful thing a calculator can tell you.

Worked examples

Real numbers run through this calculator. Open any example to load it into the form above and change it.

Thirty thousand over 46 weeks

Twenty hours a week with 60 percent of it billable and no separate business costs.

You enter

Income you want to take out: $30,000.00
Business costs the work must cover: $0.00
Weeks you will actually work: 46 weeks
Hours a week you can give it: 20 h
Share of those hours that is billable: 60%
Hours in a working day: 7.50 h
The rate you would like to charge: $40.00

You get

Hourly rate you need to charge: $54.35
Day rate at that hourly rate: $407.61
Hours you will work in a year: 920.00 h
Billable hours in a year: 552.00 h
Hours that are not billable: 368.00 h
Rate if every hour were billable: $32.61
How much the billable share raises the rate: 66.7%
Income you need per working week: $652.17
Billable hours in a week: 12.00 h
Income per working day: $130.43
Billable share needed at the rate you want: 81.5%
Extra billable hours the lower rate would need: 198.00 h
Shortfall against the income you want: $7,920.00
Income the calculated rate produces: $30,000.00

920 working hours, 552 of them billable, so the rate is 54.35 an hour and 407.61 a day. Dividing by all the working hours would have given 32.61, which is 40 percent too low.

Open this example in the calculator →

Adding the business costs

The same target income with 6,000 of annual costs and a lower billable share.

You enter

Income you want to take out: $30,000.00
Business costs the work must cover: $6,000.00
Weeks you will actually work: 46 weeks
Hours a week you can give it: 20 h
Share of those hours that is billable: 50%
Hours in a working day: 7.50 h
The rate you would like to charge: $40.00

You get

Hourly rate you need to charge: $78.26
Day rate at that hourly rate: $586.96
Hours you will work in a year: 920.00 h
Billable hours in a year: 460.00 h
Hours that are not billable: 460.00 h
Rate if every hour were billable: $39.13
How much the billable share raises the rate: 100.0%
Income you need per working week: $652.17
Billable hours in a week: 10.00 h
Income per working day: $130.43
Billable share needed at the rate you want: 97.8%
Extra billable hours the lower rate would need: 440.00 h
Shortfall against the income you want: $17,600.00
Income the calculated rate produces: $30,000.00

36,000 to cover and only 460 billable hours, so the rate rises to 78.26 an hour. At 40 an hour the work would need 97.8 percent of all the working time to be billable, which is impossible, and the shortfall is 11,600 a year.

Open this example in the calculator →

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Frequently asked questions

What hourly rate should I charge for handmade work?

Work backwards from the income you want. Thirty thousand over 46 weeks at 20 hours a week is 920 working hours, and at 60 percent billable that is 552 hours a client pays for, so the rate is about 54 an hour. Add your annual business costs to the income before dividing, because insurance, tools, software and the accountant all have to come out of the same hours. Then compare the answer with what the market pays for the work, and let the product change rather than the rate.

Why is only 50 to 70 percent of my time billable?

Because making is only part of running a craft business. Quoting, answering messages, ordering and unpacking materials, prep and conditioning, photographing, writing listings, packing, trips to the post office, bookkeeping and the accounts are all real hours that no single order pays for. Most sole traders who measure it find 50 to 70 percent billable, and the figure is lower at low volume because the fixed admin does not shrink with the order book.

Should the rate also cover my business costs?

Yes. Add the annual costs the work has to carry to the income you want, and divide the total by the billable hours. That way the rate pays for the insurance, the tools, the software and the accountant as well as you. A rate based on the income alone quietly takes the business costs out of the makers share, which is a common reason a busy year leaves nothing behind.

Is a day rate better than an hourly rate?

Clients often find a day rate or a project price easier to agree, and it avoids the awkward conversation about how long something took. Derive it from the hourly rate multiplied by the hours in a working day, then round it to a sensible figure, and never quote a project from the day rate alone: cost the materials and the hours first, add the minimum charge for a small job and a premium for a rush. The hourly figure stays the floor underneath all of it.

What if the market will not pay my rate?

Then something other than the rate has to change. The three honest options are a product that takes fewer hours for the same price, a process that removes time from the making, or a market that values the work more highly, such as commissions, wholesale to the right stockist or a smaller number of higher value pieces. Cutting the rate to fit the market means paying yourself less for the same work, and the billable share means it is usually worse than it looks: a 20 percent rate cut needs 25 percent more billable hours to stand still.