Accountants Hourly Rate (Monthly) Calculator
Estimate the hourly rate an accountant needs to charge each month to cover business costs, meet an income target and allow for profit.
Overview
This accountants hourly rate calculator estimates the monthly revenue and hourly fee needed to cover your business overheads, recover regular client expenses, reach an income target and retain a chosen profit margin. It is particularly useful when your available billing time is lower than your total working time.
How it works
The calculator first combines your target income, overheads and recoverable client expenses. It then increases this amount to allow for your selected profit margin. Finally, it divides the required monthly revenue by the number of billable hours available. Fewer billable hours increase the required rate, while a higher profit margin or higher costs also raise it.
How to use this calculator
- 1Enter the monthly income amount you want your business to support.
- 2Add your recurring monthly business overheads.
- 3Estimate the number of hours you can realistically bill in a typical month.
- 4Choose the profit margin you want to build into your pricing.
- 5Review the suggested hourly rate and adjust the assumptions as needed.
Example Calculation
Target monthly income
$6,000
Monthly business overheads
$1,500
Billable hours per month
80
Target profit margin
20%
Monthly client expenses to recover
$0
Recommended hourly rate
$117.19
With a $6,000 monthly income target, $1,500 of overheads, an 80-hour billable month and a 20% margin, required revenue is $9,375 per month and the estimated hourly rate is $117.19.
Frequently asked questions
How do I calculate my hourly rate as an accountant?
Add the monthly income you need to support to business costs, allow for a profit margin, and divide the resulting revenue target by realistic billable hours.
What counts as billable hours for an accountant?
Billable hours are time you can invoice to clients for accounting, bookkeeping, tax, advisory or related agreed work. Administration, marketing and leave are usually non-billable.
Why is my required hourly rate higher than my salary equivalent?
A self-employed or firm billing rate must usually fund overheads, unpaid work time, business risk and profit as well as the income you want to receive.
Should I include software and insurance in my hourly rate?
Usually, yes. Regular business costs such as accounting software, professional insurance, subscriptions and office costs can be included in monthly overheads.
Does this calculator include taxes?
It does not calculate personal or business taxes. You can include expected tax-related business costs within overheads, but tax treatment depends on your location and circumstances.
Can I use this calculator for fixed-fee accounting packages?
Yes. Calculate an effective hourly rate, then multiply it by the expected work hours for a package and add a suitable allowance for scope changes or risk.
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Assumptions and warnings
Assumptions
- All figures use the same currency and represent a typical month.
- Billable hours are hours that can actually be invoiced and collected from clients.
- The target monthly income is treated as a business funding requirement before personal income taxes.
- The profit margin is calculated as a percentage of required revenue.
- The result is an estimate and does not include irregular costs, bad debts, sales taxes or financing costs unless you include them in the inputs.
Warnings
- This calculator provides a business pricing estimate only and is not financial, tax or accounting advice.
- Check your actual costs, tax obligations, client contracts and local pricing conditions before setting fees.