Your real hourly rate (before tax)
$18.39 / hour
- Advertised rate (gross ÷ paid hours)
- $30.00
- Real rate as a share of advertised
- 61%
- Real rate after tax set-aside
- $15.63
- Fees paid
- $60.00
- Net before tax
- $515.00
- Net after tax set-aside
- $437.75
- Total hours (paid + unpaid)
- 28
This calculator produces estimates from the numbers you enter, so it is only as accurate as your inputs. It is not tax, accounting or legal advice. Rules and fees differ by country and change over time; check the current terms that apply to you.
The short answer
Your effective hourly rate is what you keep, before or after tax, divided by every hour the work took, including the unpaid ones. Subtract fees and expenses from what you were paid, then divide by paid hours plus the hours spent finding work, replying, revising and travelling. It is almost always lower than the advertised rate.
Worked example
These are the example values loaded into the calculator above, run through exactly the same formulas, so you can check the method against your own numbers.
| Inputs | |
|---|---|
| Gross earnings | $600.00 |
| Fees | 10% |
| Other expenses | $25.00 |
| Paid hours | 20 |
| Unpaid hours | 8 |
| Tax set-aside | 15% |
| Results | |
|---|---|
| Advertised rate (gross ÷ paid hours) | $30.00 |
| Net before tax | $515.00 |
| Real hourly rate (before tax) | $18.39 |
| Real rate as a share of advertised | 61% |
| Real hourly rate after tax set-aside | $15.63 |
A job that pays a decent rate on paper can pay very little in practice. The gap comes from the hours and costs the headline figure ignores. This calculator closes that gap. It takes what you were paid, removes fees and expenses, and divides what is left by all the time the work really took.
How to use this calculator
- Enter your gross earnings, meaning everything you were paid for this work before deductions.
- Enter the fees as a percentage, combining platform charges and payment costs.
- Add other expenses: materials, travel, software, advertising.
- Enter the hours spent on the paid work.
- Enter the unpaid hours around it: finding the work, replying, admin, revisions, travel, waiting.
- Set a tax set-aside to see your after-tax rate too.
Use a realistic period. A week or a month of real work gives a more honest figure than a single lucky job.
The formula
- Fees = gross earnings × fee percentage
- Net before tax = gross earnings − fees − other expenses
- Total hours = paid hours + unpaid hours
- Effective hourly rate = net before tax ÷ total hours
- Advertised rate = gross earnings ÷ paid hours
- After-tax rate = net before tax × (1 − tax rate) ÷ total hours
If the job produced a loss, no tax is deducted, because you cannot owe tax on a negative profit.
How to read your result
Compare three numbers. The advertised rate is what the job looks like from the outside. The effective rate before tax is what it is worth per hour of your life. The after-tax rate is what you can spend. The share shown as "real rate as a share of advertised" tells you how much of the headline the job actually delivers.
A figure well below the headline is not a reason to quit automatically. Some work is worth doing at a low rate because it builds a skill, a portfolio or a reputation, and early jobs often pay the least per hour. What matters is deciding on purpose. If the job has no such benefit and the effective rate is lower than you would accept for other work, that is a clear signal to change something or move on.
Where the hours usually hide
The unpaid column is where most disappointment comes from, so it deserves attention.
Finding work. On proposal-based platforms, time spent searching and pitching may exceed the time spent delivering. On task platforms, browsing for tasks and waiting for new ones counts as time too.
Communication. Messages, calls and clarifications are real work, particularly with demanding clients.
Revisions. Work that returns for changes outside the agreed scope costs hours you did not price.
Qualification and setup. Unpaid tests, profile building and learning a client's system are part of the cost of getting the job.
Travel and preparation. Delivery, errands and getting ready all belong in the total.
Once you record these honestly for a few jobs, you can decide which to reduce. Templates for common replies, batching similar tasks and clearer scopes all cut unpaid hours without lowering quality.
Comparing two options fairly
Run the calculator once per option using the same period. An option with a lower headline rate can win if it needs fewer unpaid hours or fewer fees. This is especially useful when comparing survey sites, micro-task platforms and freelance work. Our pages on survey sites and side hustle apps explain why the headline figures on those platforms rarely match what you keep.
Common mistakes
Leaving out unpaid time. It is the single biggest distortion.
Counting only one good week. Averages over a longer period are more honest.
Forgetting expenses. Data, fuel, equipment wear and software subscriptions all count.
Comparing gross to net. Compare like with like, before tax or after tax, across every option.
Ignoring non-money benefits. A skill gained or a client relationship started can justify a lower rate, as long as you make that choice knowingly.
Assumptions and limits
The tax figure is a flat share of your net profit. The calculator treats the hours you enter as accurate, so its output depends on how honestly you tracked them. It does not value non-monetary benefits, and it does not account for the timing of payments. For setting the rate you should charge in the first place, use the freelance hourly rate calculator, and for a wider set of options, see our list of side hustle ideas.
Frequently asked questions
What is an effective hourly rate?
It is the amount you actually keep per hour of total time spent on a job. You take what you were paid, subtract fees and costs, and divide by all the hours involved, including unpaid time such as finding the work, communicating with clients and fixing mistakes.
Why is my effective rate lower than the advertised rate?
The advertised rate usually divides gross pay by only the hours you were working on the task. It leaves out platform fees, expenses, tax, and the unpaid hours around the work. Each of those pulls the real figure down, sometimes by a large share.
Should I include tax in the calculation?
Look at both. The before-tax figure lets you compare jobs fairly, while the after-tax figure shows what you take home. This calculator shows both, using the tax set-aside you enter as a simple flat estimate.
What counts as unpaid time?
Anything the job needs that nobody pays for directly: searching for tasks, writing proposals, waiting for approvals, answering messages, unpaid qualification tests, revisions beyond the agreed scope, travel and learning a tool you need. Include it honestly, because it is the main reason real rates fall short.
How we keep this calculator accurate
The formulas on this page are standard arithmetic, written out in full above so you can check them. Each one is covered by automated tests that compare the calculator against independently worked examples and round-trip checks, and the worked example is generated by the same code as the calculator. We use no third-party data, exchange rates or fee tables, because those go stale; fees and rates are always numbers you enter. If you spot a mistake or an assumption that does not fit your situation, please tell us. Our earnings disclaimer and editorial approach explain how the site works.
Written by
The editorial team behind How To Make Money Online, responsible for researching, writing, and fact-checking every guide on this site against current platform terms and fees.