Contractor rate calculator
Plan a gross day and hourly rate from your income target, annual business costs and realistic billable capacity.
The gross amount you want the business to fund; not take-home pay.
Enter every cost you want the rate to recover.
Removed from the fixed 52-week planning year.
Do not count days already included in leave weeks.
Your estimate of otherwise available time that can be invoiced.
- Scheduled days after leave
- 240
- Other non-billable days
- −10
- Available working days
- 230
- Billable share (80%)
- 80%
- Billable days
- 184
Compare the result with your market and include any tax, insurance, pension, benefit, risk or payment-delay costs that matter to you.
Included
- Required annual revenue from your chosen personal-income target and business costs
- Working capacity after leave, other non-billable days and your expected billable share
- Required day and hourly rates under the assumptions you entered
Not included
- Tax, VAT or GST, pension, insurance, benefits and take-home income
- A market quote, guaranteed demand, payment delays, bad debt or profit beyond the income target
- Employment status, IR35, Scheinselbstständigkeit or any other legal classification
What this means
The calculator first adds your target annual personal income and the annual business costs you want to recover. That sum is the annual revenue you need.
It then estimates capacity inside a fixed 52-week planning year. Leave weeks reduce the scheduled weeks, other non-billable days are subtracted once, and your billable share is applied to the days that remain.
The required day rate is the revenue target divided by billable days. The hourly rate divides that day rate by your hours per day. These are planning values under your assumptions—not a market quote or promised income.
Formula & worked example
scheduled days = (52 − leave weeks) × working days/week available days = scheduled days − other non-billable days billable days = available days × (billable share ÷ 100) revenue target = target personal income + annual business costs required day rate = revenue target ÷ billable days required hourly rate = required day rate ÷ hours/day
$80,000 income target, $10,000 annual costs, 5 days/week, 8 hours/day, 4 leave weeks, 10 other days and 80% billable time
- Scheduled days: (52 − 4) × 5
- 240 days
- Available days: 240 − 10
- 230 days
- Billable days: 230 × 80%
- 184 days
- Revenue target: $80,000 + $10,000
- $90,000
- Day rate: $90,000 ÷ 184
- $489.13
- Hourly rate: $489.13 ÷ 8
- $61.14
With these inputs, you need about $489.13 per billable day or $61.14 per billed hour to produce $90,000 of annual revenue.
How this calculation works
The calculation follows the formulas, definitions and assumptions explained on this page. The references below support the method and any stated boundaries.
Official sources
- Australian Government — Choose a pricing strategy — Hourly pricing should account for business costs; market pricing remains a separate check.
- IHK Region Stuttgart — Required revenue — Necessary profit plus business costs equals required revenue; cost-derived prices still need a market check.
- German startup portal — Hourly-rate worksheet — Derives billable capacity after leave, absence and a correction factor for non-billable time.