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.