What Is an Hourly Rate?

An hourly rate is the amount of money you charge for every hour of delivering services to a client. Hourly rates should take into consideration the interests of both parties: budget constraints of the client and the profitability of the service provider. To calculate an hourly rate for a project that your business is working on, you’ll need to consider the rates of each of your employees.

What is the difference between an hourly rate and a billable rate?

A billable rate is what you charge for delivering a service per unit of time. An hourly rate is simply a type of billable rate that uses an hour as its unit of time. Quite frequently, both terms are used interchangeably. This is due in large part to the widespread use of hourly billing in the world of business.

Which hours does an hourly rate apply to?

Hourly rates are only applied to billable hours. Otherwise known as billable time, this only includes time spent working on the project itself. Time spent working on tasks that are only indirectly related are typically not billable.