How to Review Your Billing Rate Using Six Months of Time Data

You set your rate at some point. Maybe you calculated it carefully. Maybe you asked what others charged and added a little. Maybe you guessed.

Either way, you have been running on that number for months. The question is whether it still holds up.

What a Rate Review Actually Is

A rate review is not about whether the market has changed or whether you feel like you deserve more. Those things matter but they are secondary.

A rate review is about comparing what you quoted against what actually happened. It is a math exercise using your own data.

If you have been tracking time in Time-Trak for six months, you have enough data to do this properly.

Pull Your Effective Hourly Rate for Each Project

For every project in the past six months, calculate what you actually earned per hour. Take total revenue received for the project and divide it by total hours logged.

For hourly projects this should match your rate. If it does not, you are either writing off time, forgetting to log entries, or not capturing all the hours that belong to that client.

For fixed fee projects this number is the real story. If you quoted a flat fee and it averaged out to half your stated hourly rate, the fixed fee was wrong. Not wrong to offer, but wrong in amount.

In Time-Trak, run a project report filtered by date range. You will see total hours and total invoiced amounts side by side. The division takes five seconds.

Look for Patterns Across Projects

Do not just look at one project. Look at all of them together.

Are there specific project types where your effective rate drops significantly? Are there client types that consistently require more hours than quoted? Are there phases of work, like revisions, where you regularly work over without billing over?

Those patterns are where your rate review findings live. A single bad project can be explained away. A consistent pattern is a pricing problem.

Identify Your Non-Billable Hour Cost

Six months of data also shows you how much time you spend working without billing. New client calls, proposals, admin, bookkeeping, internal planning.

That time has a cost. It comes out of the hours available to bill. If you work 40 hours a week but only bill 25 of them, your real rate needs to cover your cost of living across all 40 hours, not just the 25.

Pull your non-billable totals from Time-Trak for the six-month period. Divide by the number of weeks. That is your weekly non-billable overhead. Factor it into what your billable rate needs to cover.

Calculate Whether Your Rate Actually Pays You

Take what you invoiced over six months. Subtract your business expenses for that period. Divide by the actual hours you worked, billable and non-billable combined.

That number is your real effective rate. Is it enough? Is it what you need to hit your income target? Is it above or below what you told clients?

If it is significantly lower than your stated rate, something is leaking. The review is how you find where.

Adjust Before the Next Quote, Not After

Once you know your real effective rate, the decision is simple. If it is close enough to your stated rate, the system is working. If there is a gap, you have two options. Fix the leak by tracking more completely and billing more accurately. Or raise the rate to account for the reality of how you actually work.

Do not wait for a gut feeling. Rates change when data tells you they should. That is what six months of time tracking is for.

Track your time, bill every minute.

Time-Trak is a native Mac and Windows time tracker with a floating timer, automatic screenshots, and one-click invoicing.

Free during beta.

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