What Should One Calculate for an Hour of Work? Hourly Rate Calculator and Tips
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| Photo by Magnet,me on Unsplash |
Hanifmr.com - I had already published articles on the subject of hourly rate calculation in the past and today it is about what one should calculate for an hour of work so that it is worthwhile.
This is not an easy subject that should be dealt with extensively. But many self-employed people take the abbreviation here or make it too easy for themselves. That's not a good idea.
By the way, you can find my hourly rate calculator on this page.
What Should One Calculate for a Working Hour (Hourly Rate)?
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| What Should One Calculate for an Hour of Work? Hourly Rate Calculator and Tips |
It often goes like this:
You look at what the competition is taking and then usually set up something below it.
The market prices are of course not unimportant, but a self-employed person has to pay a lot more things out of their pocket than, for example, an employee.
So you not only have to pay sales tax on the income to the tax office (many don't think about that until the big additional claim comes) but also pay statutory or private health insurance, finance old-age insurance, and a lot more.
And of course, you also need money to live and your own “business” needs more or less high investments. And that over and over again.
So you should think carefully about what you want to use as the hourly rate for an hour of work (from which fixed prices can then be calculated).
Because once you have introduced prices that are too low on the market, it can sometimes be difficult to raise them again.
The Hourly Rate Calculator
With the calculator from Akademie.de, you can have the optimal hourly rate calculated in great detail or you can see what is left of a net hourly rate in the end.
This is mainly intended for the self-employed but is also suitable for freelancers.
Hourly Rate
In the beginning, you enter your current hourly rate (or the hourly rate that you are currently planning).
Working Time
The second step involves entering the working hours. It is not only the actual working hours that count here, but also what percentage of them can be billed to a customer.
Vacation and illness must also be considered.
Business Costs
In a long list, you can enter the business operating expenses. This includes items such as office costs and travel expenses. But costs for equipment and office supplies are also taken into account.
Expenses for insurance are also included here, whereby purely private expenses are not specified. This is then disputed with the actual net income, what remains of the hourly rate.
All of this has already been done in great detail. There is also a small explanation for each point. Very nice.
Additional Income
In the penultimate point, you should enter further income that may still be available and that plays an important role in the calculation of taxes. The question of whether you are married is also important here.
The Result
Once you have filled out everything, the hourly rate calculator presents the results. The net income, which is left over at the end, is calculated from the annual turnover and the costs. You can display this for the hour, month, and year.
But that's not all. In addition, a few more explanations and calculations are added.
How to classify the net income is up to you, because in Germany there are huge differences in terms of the cost of living. I would like to see the hourly rates in Bavaria and Mecklenburg-Western Pomerania. They are not comparable with each other.
So What Should You Calculate for an Hour of Work?
All in all, it's a very good hourly rate calculator. You have to enter some details into the calculator and that makes it a little time-consuming to use.
But if you are about to start your own business, you should take the time. Many people will see the light as soon as they enter the costs. It's more than you normally think.
Overall, I think the calculator is very clear and good, even if you could have put the individual points on a separate page. In addition, you could also enter private costs and see whether the hourly rate is enough at all. But overall, I can recommend the hourly rate calculator to every entrepreneur and self-employed person.
How do you calculate your hourly rate and what do you attach particular importance to?
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