How much is my time worth?
An hour spent on a chore is an hour not spent earning, resting or with people you love, so it is useful to know what that hour is worth in money. Put in what you keep from your work and the hours it takes, choose how you value free time, and the calculator converts it into an hourly figure. List the jobs you could hand to someone else with their prices, and it shows which ones are worth paying for.
Price of each hour you would get back
What it costs to hand off each task, divided by the hours it frees up. Anything under your hourly value is a good deal.
Pay for it or do it yourself?
A verdict for every task, with the value you gain or lose each month by paying someone.
| Task | Hours saved | Cost | Cost per hour saved | Monthly value | Verdict |
|---|
How an hour of your time is valued
Your paid rate is what you keep for each hour your work really takes. Your time value then adjusts that by how highly you rate free time.
Handing a task off makes sense when the price of each hour it saves is lower than what that hour is worth to you.
Paid rate
Take-home pay divided by every hour work takes.
paid rate = what you keep ÷ (hours per week × weeks)
Time value
Adjusted for how much an hour of free time means to you.
time value = paid rate × free time value
Price per hour saved
For every task, the cost of handing it off divided by the hours it saves.
cost per hour = cost to hire ÷ your hours
Monthly gain
The worth of the hours saved minus the amount you pay.
value = hours × time value − cost
Questions about the value of your time
How do I work out what an hour of my time is worth?
Take what you keep after tax from your work and divide it by all the hours that work takes, commuting and unpaid overtime included. That is what your time is paid now. Then decide whether a free hour is worth more or less to you than a working one.
Why base it on take-home pay rather than salary?
Because help is paid for out of what you keep, not what you earn. If you earn $40 an hour before tax and keep $30, a cleaner at $35 an hour costs more than an hour of your own work brings in.
When does paying someone else make sense?
When the cost of each hour saved is below what your time is worth to you. A cleaner who saves 4 hours for $100 costs $25 per hour saved, which is a good trade if your time is worth more than $25 an hour and you use the hours well.
What if I would not earn extra with the hours I save?
Then the gain is free time rather than money, which is why the calculator lets you rate free time above or below your work rate. Plenty of people value evenings and weekends with family more than another hour of paid work.
Should freelancers calculate this differently?
Freelancers can often turn saved hours straight into paid work, which makes outsourcing easier to justify. Use your effective rate after tax and unbilled time, not the rate you quote, to keep it honest.
So should I outsource every task that costs less than my rate?
Not necessarily. Some things you enjoy or want to control, like cooking or gardening, are worth doing yourself. Use the numbers to drop the guilt about jobs you dislike, not to price everything in your life.