Free Contractor Rate Calculator

Our calculator uses industry-standard formulas that account for your desired income, business expenses, time off, and billable hours. The accuracy depends on how realistic your inputs are. We recommend researching market rates in your industry and adjusting your expectations accordingly. Many successful contractors use this exact methodology to set their rates.

No, don't include income taxes in your business expenses field. This calculator helps you determine your gross hourly rate before taxes. However, you should include business-related expenses like software subscriptions, marketing costs, insurance, equipment, and professional development. Remember to consult with a tax professional about your specific tax obligations as a contractor.

This calculator works perfectly for part-time contractors! Simply enter the realistic number of hours you plan to bill per week in the 'Weekly Billable Hours' field. For example, if you work part-time and bill 20 hours per week, enter 20. The calculator will adjust your hourly rate accordingly to meet your annual income goals.

As a contractor, you're not paid for time off, so it's crucial to factor this in. Most contractors account for 2-6 weeks of unpaid time off per year, including vacation, holidays, sick days, and buffer time between contracts. Consider your personal needs and financial cushion when deciding. Being realistic about time off ensures your rate truly supports your lifestyle.

Billable hours are the hours you actually charge clients for your work. Working hours include billable time plus non-billable activities like admin work, proposals, invoicing, marketing, and professional development. Most contractors find that only 60-75% of their working hours are billable. Be realistic—if you work 40 hours weekly, you might only bill 25-30 hours.

While it's tempting to underprice yourself when starting, charging too little can hurt your business sustainability and signal low quality to clients. Instead, calculate your true required rate with this tool, then consider offering your full rate with added value like extended support or additional deliverables. This maintains your rate integrity while being competitive. You can always adjust as you gain experience and testimonials.