<h1>Effective Hourly Rate: A Practical Measure for Freelancers</h1><p>Your advertised rate and your effective hourly rate answer different questions. The effective rate asks how much revenue a period produced for every hour required to deliver and support it.</p><h2>Keep the calculation consistent</h2><p>Choose a period, define the revenue included, and divide by all relevant hours. State whether taxes, refunds, and direct costs are included. Compare like with like.</p><h2>Use it as a signal</h2><p>A lower result may reflect a difficult project, unpaid revisions, administration, or missing entries. Investigate the reason before changing prices. A single period is not a universal benchmark.</p><p>Sixton organizes time by client and project so you can review the reasons behind the number.</p><h2>Source</h2><p><a href="https://www.irs.gov/businesses/small-businesses-self-employed/why-should-i-keep-records">IRS recordkeeping guidance</a> explains why records support business monitoring and financial statements.</p>