Hourly Consulting Rate Calculator

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Hourly Consulting Rate Calculator

Determine what you need to charge to meet your financial goals

The net take-home pay you want before taxes.
Software, marketing, insurance, rent, etc.
Hours spent on client work (not admin).
Annual weeks you won't be working.

Calculation Summary

$0.00 / hour

How to Set Your Hourly Consulting Rate

Transitioning from a salaried role to independent consulting requires a shift in how you view your time. Unlike an employee, a consultant must cover their own overhead, taxes, and non-billable time (like marketing and bookkeeping).

The Formula for Success

To find your ideal rate, you must first determine your "Total Revenue Requirement." This is the sum of your desired personal income and your annual business operating costs. Once you have that number, divide it by the total number of hours you realistically expect to bill in a year.

  • Total Revenue Required: Desired Salary + Business Expenses.
  • Workable Weeks: 52 weeks – Vacation/Sick weeks.
  • Annual Billable Hours: Workable Weeks × Billable Hours per Week.
  • Hourly Rate: Total Revenue Required / Annual Billable Hours.

Realistic Example

If you want to earn $90,000 a year and have $10,000 in annual expenses (laptops, health insurance, coworking space), your target revenue is $100,000.

If you take 4 weeks off per year, you have 48 weeks to work. If you spend 20 hours a week on actual client projects (billable) and the rest on admin/sales (non-billable), your annual billable hours are 960 hours.

$100,000 ÷ 960 hours = $104.17 per hour.

Factors to Consider

Don't forget that as a self-employed individual, you are responsible for the employer's portion of taxes (like FICA in the US). Many experts recommend adding a 25-30% buffer to your calculated rate to account for income tax and retirement savings.

function calculateConsultingRate() { var desiredIncome = parseFloat(document.getElementById('desiredIncome').value); var businessExpenses = parseFloat(document.getElementById('businessExpenses').value); var billableHours = parseFloat(document.getElementById('billableHours').value); var weeksOff = parseFloat(document.getElementById('weeksOff').value); if (isNaN(desiredIncome) || isNaN(businessExpenses) || isNaN(billableHours) || isNaN(weeksOff)) { alert("Please enter valid numbers in all fields."); return; } if (weeksOff >= 52) { alert("Weeks off must be less than 52."); return; } if (billableHours <= 0) { alert("Billable hours must be greater than 0."); return; } // Step 1: Calculate Total Required Revenue var totalRevenue = desiredIncome + businessExpenses; // Step 2: Calculate Working Weeks var workingWeeks = 52 – weeksOff; // Step 3: Calculate Total Annual Billable Hours var totalAnnualHours = workingWeeks * billableHours; // Step 4: Calculate Hourly Rate var hourlyRate = totalRevenue / totalAnnualHours; // Display Result document.getElementById('resultArea').style.display = 'block'; document.getElementById('finalRateDisplay').innerText = '$' + hourlyRate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + ' / hour'; document.getElementById('breakdownText').innerText = "To reach a total revenue of $" + totalRevenue.toLocaleString() + " across " + totalAnnualHours + " billable hours per year, this is the minimum rate you should charge."; // Smooth scroll to result document.getElementById('resultArea').scrollIntoView({ behavior: 'smooth', block: 'nearest' }); }

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