Calculate your ideal billable rate based on income goals, expenses, and efficiency.
$
$
%
%
Typically 60-80% for solo consultants.
Minimum Hourly Rate$0.00
Recommended Daily Rate (8h)$0.00
Gross Revenue Goal$0.00
Total Billable Hours / Year0
Annual Breakdown
Item
Value
Target Net Income
$0
+ Estimated Taxes
$0
+ Expenses
$0
= Total Revenue Needed
$0
function calculateConsultingRate() {
// 1. Get Inputs
var netIncome = parseFloat(document.getElementById('targetNetIncome').value);
var expenses = parseFloat(document.getElementById('annualExpenses').value);
var taxRate = parseFloat(document.getElementById('taxRate').value);
var weeksOff = parseFloat(document.getElementById('weeksOff').value);
var hoursPerWeek = parseFloat(document.getElementById('hoursPerWeek').value);
var efficiency = parseFloat(document.getElementById('billableEfficiency').value);
// Validation
if (isNaN(netIncome)) netIncome = 0;
if (isNaN(expenses)) expenses = 0;
if (isNaN(taxRate)) taxRate = 0;
if (isNaN(weeksOff)) weeksOff = 0;
if (isNaN(hoursPerWeek)) hoursPerWeek = 0;
if (isNaN(efficiency)) efficiency = 0;
// 2. Logic for Financials
// Formula: Net Income = (Revenue – Expenses) * (1 – TaxRate)
// Therefore: Revenue – Expenses = Net Income / (1 – TaxRate)
// Therefore: Revenue = (Net Income / (1 – TaxRate)) + Expenses
var taxDecimal = taxRate / 100;
// Avoid division by zero if tax is 100% (unlikely but safe coding)
if (taxDecimal >= 1) taxDecimal = 0.99;
var preTaxIncomeNeeded = netIncome / (1 – taxDecimal);
var grossRevenueNeeded = preTaxIncomeNeeded + expenses;
var totalTaxAmount = preTaxIncomeNeeded – netIncome;
// 3. Logic for Time
var totalWeeks = 52;
var workingWeeks = totalWeeks – weeksOff;
var totalWorkingHours = workingWeeks * hoursPerWeek;
var billableHours = totalWorkingHours * (efficiency / 100);
// 4. Calculate Rate
var hourlyRate = 0;
if (billableHours > 0) {
hourlyRate = grossRevenueNeeded / billableHours;
}
var dailyRate = hourlyRate * 8; // Assuming standard 8 hour billing day
// 5. Update UI
// Format Currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2,
maximumFractionDigits: 2
});
document.getElementById('resHourlyRate').innerHTML = formatter.format(hourlyRate);
document.getElementById('resDailyRate').innerHTML = formatter.format(dailyRate);
document.getElementById('resGrossRevenue').innerHTML = formatter.format(grossRevenueNeeded);
document.getElementById('resBillableHours').innerHTML = Math.round(billableHours).toLocaleString();
// Update Spreadsheet Table
document.getElementById('tableNet').innerHTML = formatter.format(netIncome);
document.getElementById('tableTax').innerHTML = formatter.format(totalTaxAmount);
document.getElementById('tableExp').innerHTML = formatter.format(expenses);
document.getElementById('tableGross').innerHTML = "" + formatter.format(grossRevenueNeeded) + "";
}
// Run once on load to populate defaults
calculateConsultingRate();
Mastering Your Consulting Rate: Beyond the Spreadsheet
Determining your fees as an independent consultant is one of the most challenging aspects of starting a business. Unlike a traditional salary, where your employer covers taxes, health insurance, office space, and downtime, a consulting rate must encompass all these overheads while ensuring a healthy profit margin.
Many new consultants make the mistake of simply dividing their previous annual salary by 2,080 (the standard number of working hours in a year). This approach often leads to underpricing because it fails to account for non-billable time and business expenses. This Consulting Rate Calculator Spreadsheet tool helps you build a bottom-up pricing model based on your actual financial goals.
The Logic Behind the Calculation
To calculate a sustainable rate, you must reverse-engineer the numbers starting with your desired "take-home" pay. Here are the four critical pillars this calculator uses:
Net Income Goal: This is the money that lands in your personal bank account after all business expenses are paid and taxes are withheld. It is the equivalent of your "salary."
Overhead & Expenses: Software subscriptions, liability insurance, marketing costs, accounting fees, and home office costs reduce your gross revenue. These must be added on top of your income goal.
Tax Burden: As a self-employed individual, you are often responsible for both the employer and employee portion of certain taxes (like Self-Employment Tax in the US). A safe estimate is usually 25-35% depending on your jurisdiction.
Billable Efficiency: You cannot bill clients for 40 hours a week, 52 weeks a year. You need time for business development, invoicing, administrative tasks, and vacation. A realistic efficiency rate for solo consultants is often between 60% and 75%.
Hourly vs. Daily vs. Project Rates
While this calculator outputs an hourly rate, it serves as a baseline for other pricing models:
1. Daily Rate
Many consultants prefer billing by the day. This reduces administrative tracking and shifts the focus from "minutes worked" to "value delivered." To get your daily rate, the calculator multiplies your hourly requirement by 8. However, because daily billing offers less granularity, many consultants add a premium to this rate.
2. Project/Fixed Fees
Fixed fees prevent scope creep eating into your profits only if you estimate hours correctly. Use the calculated hourly rate as your internal cost benchmark. Estimate the hours the project will take, apply your rate, and then add a 15-20% buffer for contingencies to arrive at a fixed price.
3. Retainers
Retainers provide stability. When calculating a retainer using this tool, you might offer a slight discount on your calculated hourly rate in exchange for the guaranteed recurring revenue and upfront payment.
The "3x Rule" of Thumb
If you don't have detailed expense numbers yet, a common heuristic in the consulting industry is the "Rule of Thirds" or the "3x Rule." This rule suggests that if you want to replace a salary of $50/hour, you should bill $150/hour.
1/3 covers your salary.
1/3 covers taxes and expenses.
1/3 covers administration and profit margin.
While the calculator above provides a more precise figure based on your specific inputs, the 3x rule is a good quick-check to see if your calculated rate is in the right ballpark.