Hourly Rate:
Project Fee:
Retainer Fee:
A Consulting Fees Calculator is a practical tool designed to assist consultants in determining how to set appropriate fees for their services. It helps calculate hourly rates, project fees, or retainer fees by factoring in the desired income, business overheads, tax obligations, and working hours. By offering structured calculations, this tool ensures consultants can price their services sustainably and competitively.
Formula of Consulting Fees Calculator
Step 1: Determine Fee Type
The first step is to decide on the type of fee you will charge for your consulting services:
- Hourly Rate: Charge based on hours worked.
- Project Rate: Charge a fixed fee for the entire project.
- Retainer Fee: Charge a recurring fee for ongoing services over a set period.
Step 2: Define the Formula
Each fee type has a unique calculation formula:
Hourly Rate
Hourly Rate = (Desired Annual Income + Overheads + Taxes) / Billable Hours
Project Rate
Project Fee = (Estimated Hours × Hourly Rate) + Project Expenses
Retainer Fee
Retainer Fee = (Monthly Hours × Hourly Rate) + Additional Expenses
Where:
- Desired Annual Income: The yearly earnings target.
- Overheads: Business costs such as rent, tools, subscriptions, and utilities.
- Taxes: Estimated taxes based on income.
- Billable Hours: The total hours available for billing clients.
- Project Expenses: Costs specific to the project.
- Monthly Hours: The average monthly hours dedicated to a client under a retainer agreement.
- Additional Expenses: Recurring costs tied to ongoing services.
Step3: Calculate Hourly Rate
- Add the desired income, overheads, and taxes.
- Divide the total by the estimated billable hours for the year.
Step4: Calculate Project Rate
- Estimate the total hours required for a project.
- Multiply the total hours by the hourly rate.
- Add any additional project-specific expenses.
Step5: Calculate Retainer Fee
- Determine the average monthly hours needed for a client.
- Multiply by the hourly rate.
- Add any additional recurring expenses.
General Terms Table
The table below offers approximate fees based on typical consulting scenarios:
| Desired Annual Income ($) | Overheads ($) | Taxes ($) | Billable Hours | Hourly Rate ($) | Estimated Project Fee (50 hrs + $500 expenses) | Monthly Retainer (20 hrs/month + $200 expenses) |
|---|---|---|---|---|---|---|
| 50,000 | 10,000 | 5,000 | 1,200 | 54.17 | 3,208 | 1,283 |
| 75,000 | 15,000 | 7,500 | 1,500 | 65.00 | 3,750 | 1,500 |
| 100,000 | 20,000 | 10,000 | 1,800 | 72.22 | 4,111 | 1,645 |
| 150,000 | 25,000 | 15,000 | 2,000 | 95.00 | 5,250 | 2,100 |
Example of Consulting Fees Calculator
Let’s calculate fees for a consultant with the following details:
- Desired Annual Income: $90,000
- Overheads: $15,000
- Taxes: $10,000
- Total Working Weeks: 50
- Weekly Work Hours: 40
- Non-Billable Hours: 600
- Estimated Project Hours: 60
- Monthly Hours for Retainer: 30
- Additional Retainer Expenses: $300
- Project Expenses: $700
Step 1: Calculate Total Working Hours
Total Working Hours = 50 weeks × 40 hours/week = 2,000 hours.
Step 2: Calculate Billable Hours
Billable Hours = Total Working Hours – Non-Billable Hours
Billable Hours = 2,000 – 600 = 1,400 hours.
Step3: Calculate Hourly Rate
Hourly Rate = (Desired Annual Income + Overheads + Taxes) / Billable Hours
Hourly Rate = (90,000 + 15,000 + 10,000) / 1,400 = 115,000 / 1,400 ≈ $82.14 per hour.
Step4: Calculate Project Rate
Project Fee = (Estimated Hours × Hourly Rate) + Project Expenses
Project Fee = (60 × 82.14) + 700 = 4,928.40 + 700 ≈ $5,628.40.
Step5: Calculate Retainer Fee
Retainer Fee = (Monthly Hours × Hourly Rate) + Additional Expenses
Retainer Fee = (30 × 82.14) + 300 = 2,464.20 + 300 ≈ $2,764.20 per month.
Most Common FAQs
An hourly rate is based on the time spent working on tasks, while a project rate is a fixed fee determined by the total estimated hours and specific project costs.
Retainer fees account for ongoing services over time, typically involving consistent monthly hours and recurring expenses, which makes them different from one-time project fees.
Monitor industry trends, consider inflation, and periodically reassess your overheads and desired income. Additionally, consider client feedback to ensure your rates remain fair and competitive.