Published October 17, 2026 · By the Sheaf team

How to tell which clients are actually worth it

Every freelancer has a client who feels great because the invoices are big, and another who feels like a lot of work for not much. Often the numbers say the opposite. The way to find out is your effective hourly rate per client.

Short answer: Track every hour you spend on each client, including calls, email, revisions and admin, not just the hours you bill. Divide what the client paid you by all those hours. That is your effective hourly rate for that client. Compare it with the rate you need, and you will see which clients are worth keeping, which need a price change, and which to let go.

Billable rate vs effective rate

Your billable rate is what you charge. Your effective rate is what you actually earn for every hour a client takes from you.

They are rarely the same. Fixed-fee projects run over. Some clients need three calls a week. Some send feedback in twelve rounds. None of that shows up on the invoice, but all of it comes out of your week.

Client	Paid this quarter	Billed hours	All hours	Effective rate
Client A, fixed-fee website	$12,000	n/a	165	$73
Client B, hourly at $90	$5,400	60	64	$84
Client C, retainer	$6,000	n/a	48	$125

Client A pays the most and feels like the best client. Per hour, it is the worst. Client C, the quiet retainer, earns almost twice as much for each hour of your time.

How to work it out

Track everything for a month. Every block of time for a client goes against that client: the work itself, calls, email, revisions, invoicing. Mark which is billable, but track all of it.
Add up what each client paid in the same period. For fixed fees, use the part of the fee that matches the work done, or wait until the project ends.
Divide payments by all hours. That is the effective rate.
Compare with your floor. Your floor is the lowest rate that still pays you what you need. Our hourly rate calculator works it out.

What to do with the numbers

Above your floor: a good client. Look for more work like this.
A bit below: find out where the hours go. Often it is one thing, like unpaid revision rounds or a weekly call nobody needs. Fix that first.
Far below, on a fixed fee: your quote was too low. Raise it on the next project, and put the number of revision rounds in writing.
Far below, on hourly work: you are doing work you don’t bill. Either start billing calls and admin, or raise the rate.
Far below and nothing changes: it may be time to let the client go, kindly and with notice. The hours you get back are worth more with someone else.

For small agencies: add cost rates

Once other people work on your projects, effective rate isn’t enough. Each hour also costs you something: a salary, or a contractor’s rate. Give each person a cost rate, and a project’s profit is simply what the client paid minus the cost of all the hours. Our guide to project budgets shows a full example.

Keep it light

You don’t need a spreadsheet you update every night. Track time as you work, with the client and project on each entry, and look at the numbers once a month. The first month is usually the surprising one.

Try Sheaf free Switching from Harvest

Questions

What is an effective hourly rate?

What a client paid you divided by all the hours you spent on them, billable or not. It shows what you actually earn per hour from that client.

Should I track non-billable time?

Yes, at least for a month or two. It is the only way to see where your week goes and which clients take more time than they pay for.

How often should I check?

Once a month is enough for most freelancers. For fixed-fee projects, also check halfway through, while you can still change course.

Is there a tool that does this for me?

Most time trackers can report hours per client. Sheaf also uses billable and cost rates to show profit per client and project, and it is free during beta.