Effective Hourly Rate
Effective hourly rate is what you actually earned per hour once every hour is counted, not just the billed ones. It is usually lower than your quoted rate, because unbilled time never appears in that number.
What it means
Your quoted rate is what you charge for the hours a client sees and agrees to pay for. Your effective hourly rate is different: it is the money left after costs, divided by every hour the work actually took — on site, plus every unbilled call, visit, and chase. The two numbers are rarely the same.
This is the number worth checking against your own target rate, not the quoted one. A quoted rate that looks healthy on the invoice can still produce a low effective rate once the unbilled hours behind it are added in.
You quote at $60 an hour. A job pays $600 for what looks like ten hours of work, but two more hours went into quoting, calls, and a revisit that were never billed. The effective hourly rate on that job is $50, not $60.
Tracking only the quoted rate and assuming it reflects what you actually earn — the unbilled hours behind a job are exactly what an effective-rate check is built to catch.
See also
Where this shows up
Want this handled automatically?
BizBinder keeps quotes, invoices, deposits, and reminders in one binder, so using the right term is the least of it — the underlying habit runs itself.
You are on the list.
A person reads every request. You will hear from us within one business day.
- 01 A person reads your note — not a queue.
- 02 You get an invite as spots open.
- 03 Your admin starts filing itself.
The free library is open while you wait. Nothing in it needs an account.
- guide What to do after the job — the follow-up that wins the next one One fixed routine covers the thank-you, the review ask, and the referral ask below.
- tool Client follow-up planner Put in the date a job finished and get the six follow-ups that win the next one — thank-you, review ask, one nudge, referral, check-in, win-back — as real dates you can copy or drop straight into your calendar.
- tool Job profit check Type in the price you charged, your direct costs, and the hours the job actually took — on site, travel, quoting and admin — and see the real hourly rate it paid against your own target.