Consulting Rate Calculator
Determine your ideal hourly rate based on income goals and business overhead.
How to Calculate Your Consulting Rate
Transitioning from a salaried role to independent consulting requires a shift in how you view your "hourly pay." Unlike an employee, a consultant must cover their own health insurance, software licenses, marketing, and self-employment taxes. This calculator helps you reverse-engineer your rate based on your lifestyle needs and business costs.
The Consultant's Formula
The math behind a sustainable consulting business follows this logic:
- Step 1: Gross Revenue Needed. We combine your desired take-home pay, business overhead, and a buffer for taxes.
- Step 2: Apply Profit Margin. Successful businesses don't just "break even"; they generate profit for reinvestment.
- Step 3: Determine Billable Capacity. You cannot bill 40 hours a week. Admin, sales, and networking usually take up 30-50% of your time.
- Step 4: The Final Rate. Total Revenue / (Working Weeks × Billable Hours).
Typical Consulting Rates by Experience
| Experience Level | Average Hourly Rate | Focus Area |
|---|---|---|
| Junior / Specialist | $50 – $100 | Implementation, execution-heavy tasks. |
| Senior / Manager | $100 – $200 | Strategy plus execution, specialized niche. |
| Expert / Principal | $200 – $500 | High-level strategy, complex problem solving. |
| Subject Matter Leader | $500+ | Deep industry expertise, crisis management. |
Why You Should Charge More Than Your "Employee" Rate
A common mistake is taking your previous salary, dividing it by 2080 (the hours in a work year), and using that as your rate. If you do this, you will effectively earn 40% less than you did as an employee. You must account for "unbillable" time spent on business development, invoicing, and professional development.
Frequently Asked Questions
Should I charge by the hour or by the project?
While this calculator provides an hourly baseline, many experienced consultants move to "Value-Based Pricing" or project-based fees. This prevents you from being "penalized" for being fast and efficient.
How many billable hours are realistic?
Most full-time consultants find that 20 to 25 billable hours per week is the "sweet spot." Attempting to bill 40 hours consistently often leads to burnout and a lack of new business in the pipeline.