What a project really earned you per hour
Your effective hourly rate is a project's fee divided by the hours you actually worked. On a fixed price, it shows whether the price held up. Subtract AI costs and other project costs first, and you see what your work really earned.
Effective hourly rate calculator
Your effective hourly rate
Starting values are assumptions. Effective hourly rate before costs = fee ÷ your hours; after costs = (fee − AI costs − other costs) ÷ your hours. All amounts net, in euros.
The effective hourly rate formula
Before costs: fee ÷ hours worked. After costs: (fee − AI costs − other costs) ÷ hours worked. With the starting values, 6,000 euros for 40 hours is 150 euros per hour before costs. After 300 euros of AI costs and 200 euros of other costs, 137.50 euros remain.
The difference from your target rate shows whether the project reached it. The hours at your target show how much time the fee could have paid for after costs. If you worked more hours than that, you went over budget.
Why AI costs belong in the calculation
With AI agents, your hours go down, and on a fixed price your effective hourly rate goes up. At the same time, every agent session costs money, often noticeably at API prices. Dividing the fee by your hours shows the gain in speed, but not what it cost.
On time and materials, your effective rate is usually your agreed rate, as long as you can bill every hour. It matters where hours are not billed: fixed prices, flat fees and rework the client does not pay for.
Which billing model fits AI work is covered in Fixed price vs. time and materials, and how agencies price AI work in AI agency pricing models.
Per project, without the spreadsheet
From your tracked work
For every fixed-price project, Time Momentum shows the effective hourly rate: the fixed price from the order divided by your tracked working time.
Costs alongside
AI costs at API prices or prorated from subscriptions, agent runtime and direct costs, plus the project's contribution margin.
Billing and costing
Fixed price vs. time and materials
Which billing model pays off when AI agents do part of the work.
Read guideAI agency pricing models
Fixed price, retainer, time and materials plus AI costs, or value-based, compared.
Read guide
Frequently asked questions
How do you calculate an effective hourly rate?
Divide the fee by the hours you actually worked. Subtract AI costs and other project costs first to get your effective hourly rate after costs.
What is the difference between hourly rate and effective hourly rate?
Your hourly rate is the price per hour you agreed or calculated. Your effective hourly rate is what a project earned you per hour worked in the end, after overruns, unbilled hours and costs.
Which hours should I count?
Every hour you spent on the project, including meetings, rework and debugging. Only then does the effective hourly rate show whether the price held up.
Does AI agent runtime count as working time?
No. Divide by your own working time. What the agents cost goes into the calculator as AI costs.
Can I use the calculator in dollars or pounds?
Yes. The calculator labels amounts in euros, but the formula is the same in any currency: enter dollars or pounds and read the result in that currency.
Does Time Momentum show the effective hourly rate automatically?
Yes, for every fixed-price project: the fixed price from the order divided by your tracked working time, with costs and contribution margin alongside. Orders and profitability are part of Pro; every account starts with 30 days of Pro.
See the effective hourly rate of every fixed-price project
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