Effective hourly rate
also known as effective rate · real hourly rate
What a piece of work actually earns per hour once you divide the fee by the hours it really took - regardless of how it was priced.
For example, a $6,000 fixed-fee project that ends up taking 80 hours has an effective hourly rate of $75 - well below the agency's $120 target. Calculating it after delivery shows whether the fixed price was set high enough.
Why it matters to your firm: effective hourly rate is the truth-teller behind any pricing model: it reveals what you really earned per hour after fixed fees, discounts and overruns. Tracking it across projects shows which work and which clients quietly underpay, so you can re-price or walk away.
Compare it to your target or blended rate - consistently below means the work is underpriced, whatever the pricing model says.
Effective hourly rate = total fee ÷ actual hours worked
Compare it to your target or blended rate to spot underpriced work.
Effective hourly rate calculator
Plug in your numbers - it updates as you type.