Valuing Your Time
Finding Out How Much Your Time is Worth
Do you know how much your time is worth? Unless you work in an industry where you bill clients by the hour, the answer may be "no," especially if you don't know about the many hidden factors that contribute to your hourly rate.
However, it's important to attach a monetary value to your time, because it helps you focus on high value tasks and avoid activities that don't add much value.
In this article, we’ll look at why you should value your time, and we’ll give you a quick calculator that helps you do this.
The Benefits of Costing Your Time
There are several reasons why it helps to know how much your time is worth, whether you work for yourself or for an organization.
For instance, when you know the value of your time, it's easier to stay motivated and focused on your work. It also alerts you to issues such as procrastination, excessive interruption, and maladaptive perfectionism, all of which harm productivity and waste time.
Knowing the value of your time also helps you think about which lower-value tasks you should delegate, outsource, or avoid altogether. You can then focus your time on the high-value, high-yield tasks that will make the biggest difference to your organization and to your career.
To estimate the value of your time, enter the figures below. Then, click the button at the bottom of the form to calculate the approximate value of your time.
To calculate the total yearly costs of your benefits, look at your end-of-year tax statement, your employment contract, or a pay stub; or make an intelligent guess.
Make sure that you account for all your benefits. These could include medical, dental, and vision insurance; life insurance contributions; tuition or training reimbursement; retirement contributions; or other perks such as a company car or gas allowance.
The payroll tax that your organization pays for you will depend on the country, state, or region that you live in, and will likely be a percentage of your salary and employment benefits. (Your human resources or accounting department will have this information. You may also be able to get this online, or from your local tax office.)
If you can't get hold of this figure now, estimate 10 percent.
Your organization spends money on the workspace that you use, as well as on the energy needed to heat, cool, and provide electricity to that space.
How much your organization spends yearly on these items will likely be difficult to find, so, you can estimate 10 percent of your salary for this cost. (Based on the salary you entered above, this is $0.)
Your organization invests in an infrastructure that supports the work you do (for example, IT support, administrative support, and the assistant at the front desk).
The costs for overhead and support services may be difficult to find, so estimate 40 percent of your salary for this cost. (Based on the salary you entered above, this is $0.)
This will vary depending on your sector or industry. Some professional services companies, for example, want to see a 50 percent profit on the work their people do. (Based on the salary and costs you entered above, this is $0.)
This is the number of days you work every week, multiplied by 52 (weeks). So, if you work five days a week, this figure is 260. (We'll look at vacations below.)
For information on public holidays in specific countries, see the articles on Managing Around the World in our Team Management section.
Total yearly value: $0
Total daily value: $0
Total hourly value: $0
You will probably have made a number of guesses while doing this calculation, which is fine in many cases. If you need the value of your time to be precise, talk to your HR or accounting departments.
If you're self-employed, you can use a similar approach to work out the hourly value of your time; however, make an appropriate allowance for the time that you will take to sell your services and run your business. (This may take a lot of time!)
Using Your Hourly Rate
Once you’ve worked through these calculations, you should end up with a reasonable estimate of how much your time is worth – this may be a surprisingly large amount!
This figure shows you the average value you should aim to deliver with your time, if you want to be a satisfactory performer. If you want to be a high achiever in your organization, you should aim to offer substantially better value than this!
In looking at your workload, think about a rough value for each of the things that you do. Where possible, your aim should be to concentrate on tasks with a value greater than the calculated value of your time. Then, eliminate, delegate, or outsource tasks that have a lower value than your time, where you sensibly can.
Once you know the cost of your time, you can use an app such as MeetingCalc to measure how much time you spend on activities like meetings. This can "shock you" out of holding low-value or poorly-focused meetings.
There are many good reasons why you should estimate how much your time is worth.
For instance, this helps you understand what tasks you should be doing to be a good performer, and what tasks you should eliminate, delegate, or outsource. It also helps you stay motivated, and be more productive.
To estimate the value of your time, you need to take into consideration things such as your salary and benefits, your employer’s payroll tax, as well as other overheads. When you do this, you may be shocked by how high the value of your time is!