Frequently Asked Questions
How do I calculate my consulting rate?
Start from your target annual income, add business expenses and taxes, then divide by your realistic billable hours (usually 1,000–1,500 per year after admin, marketing, and vacation). This calculator does the math for you: enter your income goal, expenses, and expected billable hours to get an hourly and day rate.
How many billable hours should a consultant use?
Most independent consultants bill 1,000–1,500 hours per year. A 40-hour week is roughly 2,000 hours, but sales, admin, professional development, and time off typically consume 25–50%. Using 1,200 hours is a safe default for a first-year consultant.
What is a good day rate compared to hourly rate?
A common rule is day rate = hourly rate x 7 or 8 (not 10), because a working day is rarely fully billable. The calculator applies this discount automatically so your day rate stays profitable.
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How to Calculate Your Consulting Rate
Setting your consulting rate requires balancing your income goals with market reality. Many consultants make the mistake of calculating based on desired income alone, forgetting to account for non-billable time, business expenses, and taxes. This calculator helps you determine a rate that covers all your costs while achieving your financial goals.
The key insight is that you can't bill every hour of your work week. Between marketing, administrative tasks, and professional development, most consultants bill 20-30 hours per week at most. Your rate needs to compensate for this unbillable time. Additionally, as an independent consultant, you're responsible for self-employment tax (15.3%), income tax, health insurance, equipment, software, and other business expenses.
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