Free contractor tool
Contractor Hourly Rate Calculator
Plan a rate for your own billable time using annual compensation, overhead, an optional reserve and a business profit margin. This is a US contractor planning worksheet, not a wage survey or tax-liability calculator.
These are example inputs, not recommended prices or a job assessment. Replace them with your own figures.
Your result
- Planning rate per billable hour
- $69.57
- Annual revenue required
- $80,000.00
- Annual billable hours
- 1,150
- Planned business profit
- $0.00
The reserve is a number you choose for planning. This tool does not calculate self-employment tax, income tax, state taxes or a market rate. Do not count the same cost in compensation, overhead and reserve.
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Count the hours you can bill
Working time and billable time are different inputs. Allow for estimating, administration, travel, time off and gaps between jobs when deciding your billable weeks and hours. The example values are not an industry benchmark.
Required annual revenue = (compensation + overhead + reserve) ÷ (1 - business profit margin ÷ 100). Divide that by billable weeks × billable hours per week for the planning rate. With $80,000 to recover and 1,150 billable hours, the unrounded rate is about $69.565 per hour.
A planning reserve is not a tax calculation
The IRS describes the general federal self-employment tax rate as 15.3%, made up of Social Security and Medicare components. Limits, other earnings and additional taxes can affect what a person owes. Federal income tax and state taxes are separate issues.
This calculator does not apply 15.3% to revenue or estimate a tax bill. Enter a reserve appropriate to your plan after discussing your situation with a qualified adviser. Compensation is a before-personal-tax target, and costs should not be duplicated across fields.
Sources and checked dates
- IRS: self-employment tax rate and limitations(2026-11-11)