Enter the desired annual salary and your expected percentage of the day you expect to bill to calculate your consulting fee.

## Consulting Fees Formula

The following formula is used to calculate an hourly rate to charge consulting fees.

\$CF = AS / 52 / 40 * (1/(B%/100))

• Where \$CF is the consulting fees per hour (\$/hr)
• AS is the desired annual salary (\$)
• B% is the percentage of the work day you expect to be able to bill for. For example, if you expect you can bill for 4 hours of an 8 hour day, that would be a 50% bill percentage.

## Consulting Fees Definition

Consulting fees are defined as the cost of the work provided by a consultant. This usually is displayed as an hourly rate.

## Example Problem

How to calculate consulting fees?

First, determine a desired annual salary. For this example, the consultant would like to make approximately \$150,000.00 per year.

Next, determine the percentage of the day the consultant expects to work for. This is the percentage of an 8 hour day. For example, in this problem, the consultant expects to be able to bill for 3 hours a day on average. This would end up being 37.5% of the day.

Finally, calculate the consulting fees rate that this person should charge in order to hit their desired annual salary.

Using the formula above:

\$CF = AS / 52 / 40 * (1/(B%/100))

= 150,000/52/40 * (1/(37.5/100))

= \$192.307/ hr

Let’s take a look and see what the rate would be if this consultant was able to add more billable hours in a day and reach 5 hours. This would be 62.5%.

\$CF = 150,000/52/40 * (1/(62.5/100))

= \$115.38/hr.