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Hourly Rate Calculator for Contractors

Struggling to determine the right hourly rate? Harvest helps contractors factor in all business expenses to set a competitive and profitable rate.

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What should you charge per hour?

Most freelancers and consultants dramatically undercharge. This calculator accounts for what most people miss: non-billable time, taxes, and overhead.

$
Accounting for vacation, holidays, sick days
60%
Most freelancers can bill 50-70% of their time. The rest goes to admin, marketing, proposals, and learning.
$
Software, insurance, equipment, accounting, taxes beyond income tax, etc.
Your break-even rate $0
Recommended rate (+20% buffer) $0
Billable hours per week 0h
Equivalent daily rate $0

Start tracking your billable hours

How this hourly rate calculator works

It works back from the income you need to the rate you must bill, accounting for the hours you can't bill.

  • Billable hours/year = working weeks × hours per week × billable %.
  • Break-even rate = (target income + business expenses) ÷ billable hours.
  • Recommended rate = break-even plus a 20% buffer for taxes, slow periods, and profit.

Raising your billable percentage or trimming expenses lowers the rate you need.

Hourly Rate Calculator for Contractors with Harvest

Harvest's calculator helps contractors set competitive hourly rates by factoring in expenses and taxes.

Screenshot of Harvest's contractor hourly rate calculator interface.

Hourly Rate Calculator for Contractors FAQs

  • When calculating your hourly rate, consider your annual income goals, business expenses, and self-employment taxes. Additionally, account for overhead costs like liability insurance and software. Harvest can help you track these costs to ensure your rate covers all expenses.

  • Taxes significantly impact your contractor rate. As an independent contractor, you pay both the employer and employee portions of FICA taxes, totaling 15.3%. This should be factored into your rate to ensure comprehensive coverage of your tax obligations.

  • Include all business-related expenses such as health insurance, liability insurance, and software costs when calculating your hourly rate. Harvest helps you track these expenses to ensure your rate is both competitive and financially sound.

  • Contractor rates are generally higher because contractors cover their own benefits and assume greater financial risk. They must account for self-employment taxes, insurance, and other business expenses, which are typically covered by an employer for permanent employees.

  • To ensure a competitive rate, stay informed about industry standards and adjust your pricing based on demand and value. Using tools like Harvest, you can track expenses and project costs to set a rate that reflects your expertise and market position.

  • Yes, Harvest allows you to track and manage business expenses efficiently. This ensures you can factor these costs into your contractor rates, providing a clear picture of your financial obligations and profitability.

  • Harvest aids in setting contractor rates by providing detailed expense tracking and project cost insights. This allows you to factor in all business costs, ensuring your rates are competitive and cover all necessary expenses.