Accountants Hourly Rate (Daily) Calculator
Estimate the hourly and daily rates an accountant may need to charge to cover income goals, business overheads, profit margin and billable time.
Overview
Use this accountants hourly rate and daily rate calculator to estimate a practical charge-out rate from your annual income goal, operating costs, preferred profit margin and realistic billable capacity.
How it works
The calculator first adds your target annual income to your annual overheads. It then increases that amount to allow for your chosen profit margin, producing a required annual revenue figure. That revenue target is divided by billable days to estimate a daily rate, then divided by billable hours per day to estimate an hourly rate. Fewer billable days or hours will increase the rate needed to reach the same revenue target.
How to use this calculator
- 1Enter the annual income you want the business to provide.
- 2Add your expected yearly business overheads.
- 3Choose a profit margin that supports your business goals.
- 4Estimate the number of days you can realistically bill each year.
- 5Enter your average billable hours per billable day and review the suggested rates.
Example Calculation
Target annual income
$75,000
Annual business overheads
$15,000
Desired profit margin
20%
Billable days per year
210
Billable hours per day
7.5
Recommended hourly rate
$71.43
With a £75,000 income target, £15,000 of annual overheads, a 20% margin, 210 billable days and 7.5 billable hours a day, the estimated rate is £71.43 per hour or £536 per day.
Frequently asked questions
How do I work out my hourly rate as an accountant?
Estimate the annual revenue your practice needs, then divide it by the client-chargeable hours you expect to deliver. Include your income goal, overheads, profit margin and non-billable time.
How do I convert an accountant daily rate to an hourly rate?
Divide the daily rate by the number of billable hours you expect to work that day. For example, a £600 daily rate over 7.5 billable hours equals £80 per hour.
How many billable days should an accountant allow for?
It depends on holidays, training, administration, marketing, client acquisition and unplanned downtime. Many independent professionals use a lower figure than total working days to avoid underpricing.
Should overheads be included in an accountant's charge-out rate?
Yes. Regular costs such as professional indemnity insurance, software, memberships, equipment and marketing generally need to be recovered through client fees.
Does the calculator include VAT or personal tax?
No. The calculation focuses on revenue, business overheads, income targets and profit margin. Consider VAT, sales taxes and personal tax separately where they apply.
Why is my required hourly rate higher than my salary equivalent?
Self-employed and practice rates often need to cover non-billable time, operating costs, leave, business risk and a profit margin, not just the income you want to receive.
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Assumptions and warnings
Assumptions
- The calculation treats target annual income and annual overheads as amounts that must be funded by client revenue.
- The profit margin is applied to revenue after allowing for the income target and stated overheads.
- Only the billable days and hours entered are assumed to generate client revenue.
- Rates are estimates and do not automatically include VAT, sales taxes, bad debts, payment processing fees or unlisted costs.
Warnings
- This calculator provides a business pricing estimate only and is not financial, tax or professional advice.
- Review your rates regularly because costs, demand, tax obligations and available billable time can change.