Independent work

Contractor hourly rate calculator

A sustainable contractor rate must pay for business costs, tax, and non-billable work from the smaller pool of hours a client can actually be charged for.

Open the full model Try it on this page

Live model

Change an assumption.
Read the consequence.

The page is statically rendered and crawlable. The editor below loads Continuum’s production evaluator and stores nothing.

Production modelLoading live evaluator

Editable source

# Sustainable contractor rate
desired_net = 5000 in usd
business_costs = 700 in usd
tax_rate = 25%
billable_hours = 110
nonbillable_hours = 35
pre_tax_income_needed = desired_net / (1 - tax_rate)
required_revenue = pre_tax_income_needed + business_costs
required_hourly_rate = required_revenue / billable_hours
utilization = billable_hours / (billable_hours + nonbillable_hours)

Inputs

What the model needs

Desired net income: The monthly amount you want available after modeled tax.
Business costs: Tools, insurance, accounting, equipment, and recurring operating expenses.
Tax rate: A planning assumption, not a tax calculation.
Billable hours: Hours you can realistically invoice in a month.
Non-billable hours: Sales, admin, learning, planning, and other necessary work.

Method

Formulas stay visible

pre_tax_income_needed = desired_net / (1 - tax_rate)required_revenue = pre_tax_income_needed + business_costsrequired_hourly_rate = required_revenue / billable_hoursutilization = billable_hours / (billable_hours + nonbillable_hours)

Continuum keeps the authored source canonical. The full production template adds interpretation and a richer preview without hiding these relationships.

Worked example

Pricing for 110 billable hours

$5,000 desired net
$700 business costs
25% modeled tax
110 billable hours
35 non-billable hours

ResultRequired revenue is about $7,367, implying a minimum rate near $66.97 per billable hour.

The utilization is about 75.9%. If only 90 hours become billable, the required rate rises materially without any change in the income goal.

Stress-test it

Reduce billable hours before increasing the income goal.
Separate taxes from business costs so both assumptions remain visible.
Model unpaid holiday and sick time through a conservative monthly billable average.

Use it when

Setting a freelance or consulting quote floor
Comparing contracting with salaried employment
Checking whether a retainer covers non-billable work

Know the boundary

Actual tax obligations depend on jurisdiction and business structure.
The minimum sustainable rate is not automatically the market rate.
Irregular expenses should be converted into a monthly allowance when material.

Questions

Why not divide desired income by 160 hours?

Contractors rarely invoice every working hour. Sales, admin, gaps between projects, and time off reduce the billable pool.

Should VAT or sales tax be included?

Taxes collected on behalf of authorities are usually modeled separately from revenue. Use rules appropriate to your jurisdiction and verify them professionally.

Does the result include profit?

Only if the desired income or cost assumptions include it. Add an explicit margin rather than assuming the minimum rate provides one.

Keep the reasoning

Turn this example into
your living model.

The full template opens as a local Continuum document. Edit every assumption, use the production preview, and keep the source.

Open contractor hourly rate calculator

Contractor hourly rate calculator

What the model needs

Formulas stay visible

Stress-test it

Use it when

Know the boundary

Turn this example intoyour living model.

Real hourly rate calculator

Cash runway calculator

LTV to CAC calculator

Turn this example into
your living model.