Consulting rate calculator

Calculate your consulting rate

How to calculate a consulting rate

The sum has three steps:

• Revenue needed = (take-home income + business costs) ÷ (1 − tax rate).
• Billable days = (52 − weeks off) × billable days per week.
• Floor day rate = revenue needed ÷ billable days. Divide the day rate by your hours per billable day for the hourly floor.

The step people get wrong is the second one. An employee is paid for 52 weeks of 40 hours, including holidays. You are not. You take time off, you get ill, and a large part of every week goes on finding the next client, writing proposals, invoicing and keeping your skills current. Nobody pays for those hours, but they have to be covered.

That is why most solo consultants bill only half to two-thirds of their working time. If you divide your income goal by 2,080 hours, you price yourself as if you will be fully booked every hour of every week of the year. You won’t be, and the gap comes out of your pay.

How much should I charge as a consultant?

The calculator gives you a floor: the least you can charge and still hit your income after costs and tax. It is a safety check, not a price.

Your price should come from the other side of the table. What does the problem cost the buyer if it stays unsolved? Lost sales, wasted staff time, a delayed launch, a risk they can’t ignore. If fixing it is worth a large sum to them, a fee well above your floor is still a good deal for them. This is value-based pricing, and it is how consultants earn more without working more days.

Avoid quoting by the hour if you can. Hourly pricing makes the buyer count your time instead of judging the result, and it pays you less for getting faster. Use your day rate to check that a fixed project fee covers the days it will take, then quote the project as one price tied to an outcome.

A worked example

A marketing consultant wants to take home 60,000 a year. Business costs are 6,000 and the overall tax rate is about 25%. Revenue needed: (60,000 + 6,000) ÷ 0.75 = 88,000.

She takes 8 weeks off for holiday, sickness and admin, and bills 3 days a week. Billable days: (52 − 8) × 3 = 132. Floor day rate: 88,000 ÷ 132 = 667. At 6 focused hours a day, the hourly floor is about 111.

Her usual project takes 10 days, so it can’t be priced under 6,667, and she needs about 13 of them a year. If she had used 52 weeks of 40 hours, she would have charged about 42 an hour and earned well under half her goal.

Thirteen projects a year is also a sales target. It tells her how many proposals she needs to win, which is where the close rate calculator comes in.

Questions people actually ask

How do I calculate my consulting rate?

Add the take-home income you want to your yearly business costs, then divide by one minus your tax rate to get the revenue you need. Divide that by the days you can really bill in a year, which is the weeks you work times the days a week you bill. That gives your floor day rate. Divide it by the hours in a billable day for your floor hourly rate.

How much should I charge as a consultant?

Never less than your floor rate, the number that covers your income, costs and tax on the days you can really bill. Above that floor, price on what the problem costs the buyer, not on your hours. If a project saves a client far more than your fee, the floor is only the start of the conversation.

Should consultants charge hourly or per project?

Per project, where you can. Hourly pricing punishes you for working fast and makes the buyer watch the clock instead of the result. Use your hourly or day rate to check a project price covers your time, then quote the project as one fixed fee tied to an outcome.

What is a typical consulting day rate?

There is no useful typical number. Day rates vary hugely by field, country, seniority and the size of the client, so an average tells you little about what you can charge. Anchor on the buyer instead: work out what the problem costs them each month or year, and price as a small share of that, never below your floor.

More free tools

• Freelance rate calculator — the hourly rate your freelance work needs to pay the bills.
• Close rate calculator — your closing ratio and the stage where deals leak.
• Lead generation calculator — how many leads you need to hit a revenue goal.

Find your real bottleneck

A rate calculator tells you what you need to charge. It can’t tell you why buyers balk at it. Usually the price isn’t the problem: the offer doesn’t make the value obvious. That is the Offer stage. The free Bottleneck Finder asks 18 questions that score all nine stages of the path from stranger to customer and names the one that’s blocking you.

Find my bottleneck — free, 5 minutes

No email, no login. The full framework is the book From Stranger to Sold; the first chapter is free.