How to use this calculator
How the hourly rate is calculated
Your desired annual take-home income is divided by one minus the tax buffer percentage to obtain a planning target for profit before taxes. We add business expenses and divide that annual revenue requirement by your expected annual billable hours. This returns the minimum average hourly revenue required under your assumptions.
Billable hours are not all working hours
Independent workers spend time on marketing, scheduling, invoicing, bookkeeping and customer communication. Those hours are important, but you may not be paid for them directly. If you have a 40-hour week but only 20 hours are billable, enter 20 hours, not 40.
Do not mistake the tax buffer for actual taxes
A flat buffer is a budgeting assumption only. Real tax obligations depend on where you live, filing status, deductions, entity structure and more. This tool intentionally avoids pretending to compute a precise federal or state tax bill.
Using the result in practice
Your calculation gives an average revenue target, not necessarily the public price of each service. You may want to charge more to account for cancellations, discounts, equipment replacement, nonpayment, seasonal work or savings goals.
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