How to use this calculator
- Enter the requested income, cost, capacity or pricing assumptions.
- Review the units and confirm that annual and project values use the same period.
- Calculate and inspect each component of the result.
- Compare at least one conservative scenario before using the estimate.
Input guide
Salary equivalent
Enter the salary equivalent ($) used for this scenario. Keep its period and unit consistent with the other fields.
Annual benefits value
Enter the annual benefits value ($) used for this scenario. Keep its period and unit consistent with the other fields.
Annual overhead
Enter the annual overhead ($) used for this scenario. Keep its period and unit consistent with the other fields.
Target margin
Enter the target margin (%) used for this scenario. Keep its period and unit consistent with the other fields.
Annual billable hours
Enter the annual billable hours used for this scenario. Keep its period and unit consistent with the other fields.
How this calculator works
Consulting rate = (salary equivalent + benefits + overhead) ÷ (1 − margin) ÷ billable hours.
Worked example
A $120,000 cost base at 20% margin across 1,100 hours requires about $136.36 per hour.
How to interpret the result
Treat the result as a planning baseline. A sustainable freelance decision should also account for unpaid administration, sales time, leave, late payments, market positioning and costs not represented by the selected fields.
Rounding policy
Currency and percentages
Money is rounded to cents and percentages to two decimals.
Assumptions and limitations
- All business costs and reserve percentages are user-entered.
- Billable capacity should exclude realistic non-billable time, leave and business development.
Frequently asked questions
Is this tax or accounting advice?
No. It is a transparent planning estimate based only on the values entered.
Should I compare multiple scenarios?
Yes. Test conservative and optimistic billable capacity, expenses and margin assumptions before setting a rate or price.
When should I recalculate with the Consulting Rate Calculator?
Recalculate whenever your capacity, expenses, target income, margin, reserve or project scope changes.
Why should I use realistic assumptions in the Consulting Rate?
Using total working time as billable time usually understates the rate or price required because administration, sales, leave and downtime are not invoiced.