How it works
How to calculate it
The calculator applies the values you enter to this formula:
Rate = (income goal + expenses + benefits) ÷ billable hours ÷ (1 − tax reserve).
How to use this calculator
- Set an annual take-home target.
- Add business expenses and self-funded benefits.
- Estimate conservative billable hours and a tax reserve.
Worked example
A $70,000 income goal plus $27,000 in costs, with 1,152 billable hours and a 25% reserve, suggests about $112/hour.
Important assumptions
- The tax reserve is a planning percentage, not a tax calculation.
- Billable utilization accounts for sales, admin, and unpaid time.
- Seek professional tax and business advice for your circumstances.
Common mistakes to avoid
- Treating all working hours as billable.
- Leaving time off and benefits unfunded.
- Using the tax reserve as a tax calculation.
Method reviewed June 10, 2026. Prices and rates are user-provided defaults and should be replaced with local values.