Canonical formula calculator
EFFECTIVE HOURLY RATE
What every hour you actually worked translated to in revenue — the number that exposes whether your business pays you fairly.
Total revenue generated in the period — the dollars that came in for work delivered.
Total hours actually spent generating that revenue. Include planning, communication, revisions — everything the work required, not just billable hours.
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Add context for case suggestions
Optional — helps us match this calculation against relevant case studies (coming soon).
What this tells you
Effective hourly rate is what you actually earn per hour of work, regardless of what you charge clients or whether you bill by the hour at all. It exposes whether your business is paying you fairly. A consultant charging $250 an hour who works 60 hours to deliver every $5K project has an effective hourly rate of $83, not $250.
When to use it
Calculate this quarterly. Compare it to what you would make at a job with similar skills. If your effective hourly rate is below your alternative wage, you have a structural problem in how you scope work, price work, or both. Service businesses get away with poor effective hourly rates because nobody calculates them; once you do, the choices become clear.
What it doesn’t tell you
Effective hourly rate does not account for the upside of running your own business — flexibility, equity in what you build, the ability to compound knowledge across clients. A lower effective hourly rate today might be the right trade for assets you are building. But you cannot make that decision unless you know the number.
Coming soon
Cases, plays, and benchmarks for this metric will appear here as the Moonshot knowledge libraries grow. For now: log in to track your number over time and Moonshot will surface trend warnings when the substrate fills in.