{
  "slug": "agency-effective-hourly",
  "title": "Project Effective Hourly Rate Calculator",
  "heading": "Effective Hourly Rate Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/agency-effective-hourly",
  "summary": "Divide the real project fee by every hour it consumed, including sales and admin.",
  "description": "The rate on your proposal is fiction until you count the unpaid hours around the work: the pitch, the scoping calls, the revisions, the invoicing chase. This calculator takes the fee, subtracts pass-through costs, then divides by all in hours — delivery plus pre-sales plus admin — to show what you genuinely earned per hour on the engagement. Freelancers and small agencies routinely discover a $10,000 project that felt like a $150/hr win actually paid $78/hr once the 14 hours of proposal work and 9 hours of admin were counted. Running this on your last five projects usually reveals the client type worth repeating and the one worth firing.",
  "formula": "Net fee = Fee − pass-through costs. All-in hours = delivery + pre-sales + admin + revisions. Effective rate = Net fee ÷ all-in hours.",
  "dateModified": "2026-08-25",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=agency-effective-hourly",
  "inputs": [
    {
      "id": "fee",
      "label": "Project fee",
      "kind": "number",
      "hint": null,
      "default": 10000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "pass",
      "label": "Pass-through costs",
      "kind": "number",
      "hint": "Subcontractors, stock, ad spend you fronted",
      "default": 900,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "delivery",
      "label": "Delivery hours",
      "kind": "number",
      "hint": null,
      "default": 62,
      "unit": "hrs",
      "min": 0,
      "max": null
    },
    {
      "id": "presales",
      "label": "Pre-sales hours",
      "kind": "number",
      "hint": "Discovery, proposal, pitch",
      "default": 14,
      "unit": "hrs",
      "min": 0,
      "max": null
    },
    {
      "id": "revisions",
      "label": "Revision hours",
      "kind": "number",
      "hint": null,
      "default": 11,
      "unit": "hrs",
      "min": 0,
      "max": null
    },
    {
      "id": "admin",
      "label": "Admin & invoicing hours",
      "kind": "number",
      "hint": null,
      "default": 9,
      "unit": "hrs",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "effective",
      "label": "True effective hourly rate",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "naive",
      "label": "Rate if you only counted delivery",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "allHours",
      "label": "All-in hours",
      "format": "number",
      "hint": null,
      "primary": false
    },
    {
      "id": "hiddenHours",
      "label": "Hours outside delivery",
      "format": "number",
      "hint": null,
      "primary": false
    },
    {
      "id": "netFee",
      "label": "Fee after pass-throughs",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Project fee: 10000 $",
      "Pass-through costs: 900 $",
      "Delivery hours: 62 hrs",
      "Pre-sales hours: 14 hrs",
      "Revision hours: 11 hrs",
      "Admin & invoicing hours: 9 hrs"
    ],
    "outputs": [
      "True effective hourly rate: $94.79",
      "Rate if you only counted delivery: $146.77",
      "All-in hours: 96",
      "Hours outside delivery: 34",
      "Fee after pass-throughs: $9,100.00"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter project fee ($).",
      "Enter pass-through costs ($) — Subcontractors, stock, ad spend you fronted.",
      "Enter delivery hours (hrs).",
      "Enter pre-sales hours (hrs) — Discovery, proposal, pitch.",
      "Enter revision hours (hrs).",
      "Enter admin & invoicing hours (hrs).",
      "Read your true effective hourly rate on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "fee": 6000,
        "pass": 550,
        "delivery": 37,
        "presales": 8,
        "revisions": 7,
        "admin": 5
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "fee": 10000,
        "pass": 900,
        "delivery": 62,
        "presales": 14,
        "revisions": 11,
        "admin": 9
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "fee": 16000,
        "pass": 1450,
        "delivery": 99,
        "presales": 22,
        "revisions": 18,
        "admin": 14
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Should pre-sales hours for lost pitches count too?",
      "a": "Not on a single project, but you should allocate them across won work at the portfolio level. If you spend 100 hours a year pitching and win a third of it, add roughly a third of those hours to each won engagement to see the honest number."
    },
    {
      "q": "Why subtract pass-through costs from the fee?",
      "a": "Because money that flows through you to a subcontractor or ad platform is not revenue you earned — including it inflates your rate and hides that you're doing unpaid procurement work. If you mark pass-throughs up, count only the markup."
    },
    {
      "q": "What effective rate should a freelancer target?",
      "a": "Work backwards from income: desired annual income plus taxes and overhead, divided by realistically billable hours (usually 1,000-1,300 for a solo operator, not 2,000). A $120k target income commonly implies a $150-190 effective rate, well above what most people quote."
    },
    {
      "q": "Is a low effective rate always bad?",
      "a": "No — a strategic first project with a reference-grade logo, or a deliberately cheap pilot that opens a retainer, can be worth it. It only becomes a problem when you can't tell the difference because you never measured."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/retainer-scope-creep",
    "https://www.revenuelab.fyi/toolbox/agency-blended-rate",
    "https://www.revenuelab.fyi/toolbox/proposal-win-rate-cost"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Project Effective Hourly Rate Calculator (https://www.revenuelab.fyi/toolbox/agency-effective-hourly)"
}