How to Calculate Billing Rates

by Carter McBride ; Updated July 27, 2017
Find the bill rates for different services to see how much you are paying per hour.

Often people will receive a bill without a billing rate. To determine the billing rate, you need to divide the bill by the number of hours worked. This allows you to see how much a person billed you for his work. The billing rate is good to know for future circumstances so you can find a person who charges a reasonable billing rate.

Step 1

Determine the total cost for the services. This number will be on the company's bill. For example, a law firm charges Person A $10,000 for work on a divorce case.

Step 2

Determine how much time the person providing services put in to your business. Lawyers will disclose the amount of billable hours to a client. For services that do not disclose billable hours, make a general rough estimate of hours worked, like it normally takes two hours to clean a house. In our example, the lawyer had 10 billable hours on the divorce case.

Step 3

Divide the cost for the service by the hours worked on the services to determine the billing rate. In our example, $10,000 divided by 10 hours of work equals a billing rate of $1,000 an hour.

About the Author

Carter McBride started writing in 2007 with CMBA's IP section. He has written for Bureau of National Affairs, Inc and various websites. He received a CALI Award for The Actual Impact of MasterCard's Initial Public Offering in 2008. McBride is an attorney with a Juris Doctor from Case Western Reserve University and a Master of Science in accounting from the University of Connecticut.

Photo Credits