.calc-container {
max-width: 800px;
margin: 20px auto;
font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif;
background: #f9f9f9;
padding: 30px;
border-radius: 8px;
box-shadow: 0 4px 15px rgba(0,0,0,0.1);
border: 1px solid #e0e0e0;
}
.calc-header {
text-align: center;
margin-bottom: 25px;
color: #2c3e50;
}
.calc-grid {
display: flex;
flex-wrap: wrap;
gap: 20px;
}
.input-group {
flex: 1 1 300px;
display: flex;
flex-direction: column;
}
.input-group label {
font-weight: 600;
margin-bottom: 8px;
color: #34495e;
font-size: 14px;
}
.input-group input {
padding: 12px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
transition: border-color 0.3s;
}
.input-group input:focus {
border-color: #3498db;
outline: none;
box-shadow: 0 0 5px rgba(52,152,219,0.3);
}
.calc-btn-wrapper {
width: 100%;
text-align: center;
margin-top: 20px;
}
.calc-btn {
background-color: #27ae60;
color: white;
border: none;
padding: 15px 40px;
font-size: 18px;
font-weight: bold;
border-radius: 5px;
cursor: pointer;
transition: background-color 0.3s;
}
.calc-btn:hover {
background-color: #219150;
}
.results-area {
margin-top: 30px;
background: #fff;
padding: 20px;
border-radius: 5px;
border-left: 5px solid #27ae60;
display: none;
}
.results-area h3 {
margin-top: 0;
color: #2c3e50;
}
.result-row {
display: flex;
justify-content: space-between;
padding: 10px 0;
border-bottom: 1px solid #eee;
font-size: 16px;
}
.result-row.final {
font-weight: bold;
color: #27ae60;
font-size: 22px;
border-bottom: none;
margin-top: 10px;
}
.article-content {
max-width: 800px;
margin: 40px auto;
font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif;
line-height: 1.6;
color: #333;
}
.article-content h2 {
color: #2c3e50;
margin-top: 30px;
}
.article-content p {
margin-bottom: 15px;
}
.article-content ul {
margin-bottom: 15px;
padding-left: 20px;
}
.article-content li {
margin-bottom: 8px;
}
function calculateRate() {
// 1. Get input values
var targetSalary = parseFloat(document.getElementById('targetSalary').value);
var annualOverhead = parseFloat(document.getElementById('annualOverhead').value);
var taxRate = parseFloat(document.getElementById('taxRate').value);
var profitMargin = parseFloat(document.getElementById('profitMargin').value);
var billableHoursPerWeek = parseFloat(document.getElementById('billableHoursPerWeek').value);
var weeksWorkedPerYear = parseFloat(document.getElementById('weeksWorkedPerYear').value);
// 2. Validation
if (isNaN(targetSalary) || targetSalary < 0) targetSalary = 0;
if (isNaN(annualOverhead) || annualOverhead < 0) annualOverhead = 0;
if (isNaN(taxRate) || taxRate < 0) taxRate = 0;
if (isNaN(profitMargin) || profitMargin < 0) profitMargin = 0;
if (isNaN(billableHoursPerWeek) || billableHoursPerWeek <= 0) billableHoursPerWeek = 1;
if (isNaN(weeksWorkedPerYear) || weeksWorkedPerYear = 1) taxDecimal = 0.99;
var baseRevenueNeeded = (targetSalary + annualOverhead) / (1 – taxDecimal);
// Add Profit Margin
// Profit is calculated on top of the base revenue needed
var profitDecimal = profitMargin / 100;
var totalGrossRevenue = baseRevenueNeeded * (1 + profitDecimal);
// Calculate Actual Tax Amount based on the Total Gross Revenue
// Note: Simplified tax logic assuming tax is applied to total gross revenue
var estimatedTaxes = totalGrossRevenue * taxDecimal;
// Calculate Hourly Rate
var hourlyRate = totalGrossRevenue / totalBillableHours;
// 4. Display Results
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
document.getElementById('resGrossRevenue').innerText = formatter.format(totalGrossRevenue);
document.getElementById('resTotalHours').innerText = Math.round(totalBillableHours).toString();
document.getElementById('resTaxes').innerText = formatter.format(estimatedTaxes);
document.getElementById('resHourlyRate').innerText = formatter.format(hourlyRate);
document.getElementById('resultDisplay').style.display = 'block';
}
How to Calculate Your Contractor Hourly Rate
Setting the right hourly rate is one of the most critical challenges for independent contractors, freelancers, and consultants. Unlike traditional employment, where taxes and overhead are handled by the employer, a contractor must price their services to cover all business expenses, taxes, and non-billable time, while still generating a profit.
1. Start with Your Desired Net Income
The first step is determining your target "take-home" pay. This is the amount you want to have available for personal living expenses after all business costs and taxes are paid. A common mistake is using a previous salary as the hourly rate. If you earned $75,000 as an employee, you need to charge significantly more than $75,000/year to maintain the same standard of living as a contractor.
2. Factor in Overhead Costs
Every business has overhead. As a contractor, you must account for these costs in your rate. Common overhead expenses include:
- Hardware & Software: Laptops, creative suites, accounting tools, and subscriptions.
- Office Space: Rent for a coworking space or a portion of your home utilities.
- Insurance: Liability insurance, health insurance, and disability coverage.
- Marketing: Website hosting, advertising, and networking events.
3. Understanding Billable vs. Non-Billable Hours
You cannot bill for every hour you work. A standard work year is 2,080 hours (40 hours x 52 weeks), but a contractor might only bill 50% to 75% of that time. The rest is spent on administrative tasks, finding new clients, accounting, and professional development. Furthermore, you must account for unpaid time off, such as vacations and sick days. Our calculator allows you to input "Billable Hours per Week" and "Weeks Worked per Year" to give you a realistic divisor for your revenue goals.
4. The Tax Burden
Contractors are responsible for the full burden of taxation, including the self-employment tax (Social Security and Medicare), which is typically split between employer and employee in a traditional job. Depending on your location, you may need to set aside 25% to 35% of your gross revenue for taxes. This calculator uses a "reverse calculation" method to ensure that your rate is high enough to pay these taxes and still leave you with your desired net salary.
5. Adding a Profit Margin
Finally, a business should do more than just break even on salary and costs; it should generate profit. This profit margin allows you to reinvest in the business, save for lean months, or expand your operations. A margin of 10% to 20% is standard for many professional service contractors.
By inputting these variables into the calculator above, you can confidently quote a rate that supports a sustainable and profitable business model.