Billing & utilisation
Effective hourly rate calculator
Your rate card says one number. Fees collected divided by every hour actually worked says the true one.
- Effective hourly rate
- ₹1,364
- Discount vs stated rate
- 24.2%
Runs entirely in your browser — nothing you type is sent or stored. Indicative arithmetic, not legal, payroll or tax advice.
The formula
- Effective rate = fees collected ÷ total hours worked (billable + non-billable)
- Discount vs stated = 1 − (effective ÷ stated rate)
Why the effective rate is always lower
Every unbilled hour dilutes the rate: proposals, revisions beyond scope, project management the fee did not cover, the invoice that settled at 90%. A studio quoting ₹1,800 an hour that collects ₹3,00,000 for 220 hours of total effort actually earned about ₹1,363 — a 24% silent discount.
The effective rate is the honest input for every other decision: pricing the next retainer, deciding whether fixed-fee work pays, comparing a difficult client against an easy one. Two clients on identical rate cards can differ by 40% in effective rate once revisions and delays are counted.
Using it per client, not just overall
Compute this number per client each quarter. The clients with the lowest effective rate are rarely the ones with the lowest rate card — they are the ones whose work sprawls beyond what was scoped. That is a conversation about scope and process you can have with data instead of frustration.
Stop calculating this by hand
Workclave gives you the denominator for free: every hour, billable or not, already attributed to a client and project — so the effective rate per client is a filter, not a forensic exercise.
Effective hourly rate calculator — common questions
Should I include admin and internal hours in the divisor?
For your overall effective rate, yes — that is the point. Every hour the business paid for is in the denominator. For a per-client effective rate, include all hours spent on that client, billable or not.
My effective rate is 30% below my stated rate. Is that normal?
It is common, and it is worth fixing. Gaps that size usually decompose into untracked small tasks, free revisions and underscoped fixed fees. Measuring which of the three dominates tells you whether the fix is tracking, contract language or pricing.
How does this relate to realisation rate?
Realisation compares hours invoiced to hours worked; effective rate compares money collected to hours worked. Realisation catches write-offs before the invoice; effective rate also catches discounts and unpaid invoices after it.
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