Profit per Hour Calculator
Calculate your true profit per hour worked.
Enter revenue, costs, and hours to see your effective hourly rate and whether you're meeting your income goals.
Profit per hour measures how much actual profit a business generates for each hour of operation or labor invested. It is a more useful metric than total revenue because it accounts for what actually stays in the business after costs — and it exposes efficiency problems that top-line revenue hides.
The formulas: Hourly Revenue = Total Revenue / Hours Worked Hourly Profit = Net Profit / Hours Worked Profit Margin = (Net Profit / Revenue) × 100
Where Net Profit = Revenue − All Costs (materials, labor, overhead, marketing, etc.)
Worked example — Freelance designer: Monthly revenue: $8,500 Costs: Software $120, advertising $200, subcontractor $800, tools $150 = $1,270 Net Profit = $8,500 − $1,270 = $7,230 Hours worked: 160 hours (40 hrs/week × 4 weeks) Profit per hour = $7,230 / 160 = $45.19/hour
Worked example — Small retail shop: Monthly revenue: $42,000 Costs: Inventory $18,000, rent $3,500, staff $9,000, utilities $600, misc $900 = $32,000 Net Profit = $42,000 − $32,000 = $10,000 Hours open: 10 hrs/day × 26 days = 260 hours Profit per hour = $10,000 / 260 = $38.46/hour
Why this metric matters: A business making $200,000/year sounds great — until you realize the owner works 80-hour weeks, earning $48/hour before personal taxes. A business making $80,000 with 35-hour weeks earns $44/hour with far better quality of life.
Compare your profit-per-hour to: (a) your previous job’s effective hourly rate and (b) the legal minimum wage in your region. This clarifies whether the business is truly worth running.