Consulting Fees Calculator
From target income, work weeks, billable hours, overhead and profit, derive the hourly rate a self-employed consultant should charge.
Input Data
Results
At a glance:For self-employed consultants: billable hours/year = weeks x billable hours/week; base rate = target income / billable hours; suggested rate = base x (1 + overhead%) x (1 + profit%). It reverses a cost-plus target into an hourly fee. Core idea: do NOT divide old salary by total hours — only part of time is billable, and you must cover overhead and profit. Example: 800k target, 48w x 30h (1,440h), 20% overhead, 15% profit → base 555.56, suggested 766.67. WARNING: Billable hours usually 50-70% of total; overestimating sets rate too low. Benchmark market/experience; this is a floor, not the final price. Education, not advice.
Formula
Billable hours/year = weeks × billable hours/week.
Base rate = target income / billable hours.
Suggested rate = base × (1 + overhead%) × (1 + profit%).
$$$H = Weeks\\times HoursPerWeek$$$$$$Base = \\dfrac{TargetIncome}{H}$$$$$$Rate = Base\\times(1+Overhead\\%)\\times(1+Profit\\%)$$$How to Use
- Enter your target annual income (pre-tax).
- Enter work weeks and billable hours per week.
- Enter overhead and profit rates.
- View the suggested hourly rate as a pricing reference.
FAQ
Why can't I just divide my old salary by total hours?
Because as self-employed you pay your own overhead, MPF and benefits, have no paid leave, and cannot bill every hour (business development, admin, training, rest all take time). Dividing salary by total hours badly underprices and won't sustain the business.
How should I estimate billable hours?
Estimate actual work weeks (minus holidays, ~46-50) then truly billable hours/week. Usually only 50-70% of total time is billable; be conservative to avoid setting the rate too low.
Is the result my final quote?
It is a cost-and-profit-based floor. Actual quotes should also weigh market rates, your positioning and experience, client value and competition. If you create clear value, value-based pricing can justify charging more.
What are billable hours and why are they far below total hours?
Billable hours are the time you can actually charge clients — the most critical and most overestimated number in consulting pricing. Why so low? A self-employed consultant spends much time on non-billable work: business development (finding clients, proposals, contracts, networking, marketing), admin (bookkeeping, invoicing, chasing payment, tax, email, software), training (staying current), gaps between projects, and unpaid leave/sickness/holidays. A 40-hour week may yield only 25-30 billable hours. Estimate conservatively; new freelancers especially overestimate and underprice. With experience, the billable ratio may rise but rarely hits 100%.
Is the suggested rate what I should charge clients?
Not exactly — it is an inside-out reference floor (what you must average to hit your target), not the price for every client. Actual pricing also depends on market rates, your value/positioning, client and project nature, negotiation room, and value vs cost pricing. Treat it as a floor (do not go below) and a negotiation anchor, then adjust with market, positioning and client context. This tool is a pricing starting point, not business or financial advice.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.