Floor rate vs effective rate: which number actually pays you
Your quoted hourly rate is a promise. Effective rate is fee divided by every hour the job took. The floor is the line below which a client is no longer paying you.
The rate on the invoice is not the rate you earned. Quoted rate is the promise. Effective rate is fee divided by every hour the job actually took. The floor is the line you set: below it, that client is no longer paying you.
Three numbers, one week
You told a client $90/hour. The invoice is $1,800 for 20 billed hours. That looks like $90. Then you count the week honestly: two hours of prep the night before, a revision round, a “quick” call. Twenty-seven hours of work for $1,800. Effective rate: about $67.
Nothing in the bank statement looks wrong. The week still happened. Utilization is the share of hours that were actually billed. Effective rate is what those hours were worth after the unbilled ones.
The floor is a line you set
A floor rate is not a market average and not a hope. It is the lowest number at which you still want the work. If a client’s effective rate sits under it, CronLoom’s job is to show you that. The question is which client still pays.
You can set a floor before you have perfect data. Then you measure against it. The hourly rate guide is how you pick a quote. This page is how you check whether the quote survived contact with the week.
How to check a week without a tracker
- Take one closed job.
- Write the fee.
- Write every hour: billed, revision, admin, the call.
- Divide. That is effective rate.
- Put your floor next to it.
If you do not want to do the division by hand, use the effective hourly rate calculator. If you want the line watched while you track, join the waiting list.
What this is not
It is not a claim that your rate is falling. It is not invoicing. It is not a reason to fire a client from a single week. It is a reading: quoted, effective, floor. Same week, three numbers.
Questions, answered straight
Frequently asked questions
- What is the difference between quoted rate and effective rate?
- Quoted rate is what you put on the invoice. Effective rate is that fee divided by every hour the work actually took, including revisions, admin, and the call you never billed. They only match if you billed every hour.
- What is a floor rate?
- The lowest rate your time is still worth. You set it. If a client's effective rate sits below it, that client is no longer paying you, even if the invoice looks fine.
- How do I calculate effective rate?
- Fee divided by actual hours. Include the hours that never appeared on the invoice. The free effective-rate calculator on cronloom.io does the division.
Put numbers to it
Every hour, accounted for.
You set a floor rate; CronLoom flags the clients and fixed bids that slip below it, and projects where the month lands.
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