Charge at least the floor the year requires. Pick the net income you need, add the overhead you will pay whether or not a client is in the room, and gross that sum up for tax. Then divide by the hours you will actually bill. That number is how much to charge as a consultant if you want the year you typed to close. A project can be priced above it. An hour priced below it only works if you bill more hours than you typed.
The Consultant Rate Calculator does that division in the browser. On the defaults it shows a floor of ₹4,444 an hour, from 828 billable hours and ₹36,80,000 of gross to collect. The labels say rupees. The math does not convert currency, so the same steps work in dollars if every money field uses dollars.
A dollar illustration, separate from those defaults: $120,000 target net, $18,000 overhead, 25 percent tax drag, 30 hours available a week, 6 weeks off, and 60 percent utilization. Gross to collect is $184,000. Billable hours are still 828. $184,000 ÷ 828 is $222.22, which rounds to $222 an hour. Six of those rounded hours is $1,332. Change any input and the charge changes. There is no single rate that fits every practice.
Start from the year, not the meeting
People set a rate by copying a peer or by naming a number that feels expensive in the proposal. Both miss the year. A high quote on one project does not pay the weeks with no project. A low quote that wins the work can still miss the income you said you needed, once overhead and unbilled time are in the sum.
The floor answers a narrower question: if the year goes the way you typed it, what must each billed hour collect? Price a project above that when the work is worth more. Hours priced below it only work if you bill more of them than you typed.
The six inputs on the calculator
The form has six fields. The labels are in rupees. The steps are the same in dollars, pounds, or any other currency, as long as every money field uses that one currency. The tool does not convert.
- Target annual net. What you want left after overhead and the tax drag. The field accepts ₹1,00,000 to ₹5,00,00,000. The default is ₹24,00,000.
- Hours available per week. Hours you can work, not hours a client will pay for. The field accepts 1 to 60. The default is 30.
- Weeks off per year. Holiday, illness, and the weeks you will not work. The field accepts 0 to 20. The default is 6. Working weeks are 52 minus that number.
- Utilization. The share of available hours that become billed hours. The slider runs from 20 percent to 90 percent. The default is 60 percent. You cannot type 100.
- Annual overhead. Rent, software, insurance, accounting, and the other costs that do not sit inside a client invoice. The field accepts ₹0 to ₹1,00,00,000. The default is ₹3,60,000.
- Tax and compliance drag. A flat percent of the gross you must collect. The slider runs from 0 percent to 50 percent. The default is 25 percent.
Read the hour field as availability. The label says “Hours available / week,” and the next control, utilization, is what turns availability into a bill. If you type 30 and leave utilization at 60, you are saying 18 of those hours get invoiced in a working week. The other 12 are sales, admin, rewriting, and the work you do not bill.
The arithmetic, in order
Working weeks come first. Subtract weeks off from 52. Six weeks off leaves 46 working weeks. The tool will not go below one working week, which matters only if weeks off were above 51. The form stops at 20, so on the page working weeks run from 32 to 52.
Billable hours are next. Multiply hours available per week by working weeks, then by utilization. At the defaults that is 30 × 46 × 0.60, which is 828 billable hours in the year. The tool rounds the hour count to the nearest hour when it prints the line. 828 is already a whole number.
Gross to collect comes after the hours. Add target net and annual overhead, then divide by one minus the tax drag. At 25 percent the divisor is 0.75. Net of ₹24,00,000 plus overhead of ₹3,60,000 is ₹27,60,000. Divide by 0.75 and the gross is ₹36,80,000. That is the amount invoices have to total if ₹3,60,000 of overhead comes off and a quarter of the gross is the tax drag, leaving the ₹24,00,000 you asked for.
The floor hourly rate is that gross divided by billable hours. ₹36,80,000 ÷ 828 is ₹4,444.44, and the tool rounds to the nearest rupee, so the screen says ₹4,444. If income or weekly hours are empty, the tool refuses the rate and asks you to set both. With the form’s minimums, a filled page always has a number.
The tool will not divide by less than 0.15, a tax drag of 85 percent or more. The slider stops at 50 percent, so on the page the divisor never drops below 0.50.
The default example, line by line
Open the calculator and leave the defaults. You should see the same lines this section lists. If a field has been changed, set it back before you compare.
- Target net: ₹24,00,000
- Overhead: ₹3,60,000
- Gross to collect: ₹36,80,000
- Working weeks: 46
- Utilization: 60 percent
- Billable hours in the year: 828
- Floor hourly rate: ₹4,444
- Quoted day rate at 6 hours: ₹26,667
The day-rate line is the hourly floor times 6, then rounded to the nearest rupee. 4,444.44 × 6 is 26,666.67, which rounds to ₹26,667. It is not an 8-hour day, and it is not 8 × ₹4,444. If you quote a day as eight billed hours, you are describing a day the tool did not calculate.
Check the gross against the net before you trust the hour. ₹36,80,000 minus a 25 percent drag is ₹27,60,000. Subtract ₹3,60,000 of overhead and ₹24,00,000 remains. Then check the hours. 828 × ₹4,444 is ₹36,79,632, which is ₹368 short of ₹36,80,000 because the hourly figure was rounded down from ₹4,444.44. On a year of this size, that rounding is noise. It is still worth seeing, so you do not “fix” the calculator by multiplying the rounded rate backward and deciding the tool is wrong.
Utilization moves the rate more than the week does
Utilization is the input people set too high. Sixty percent of a 30-hour week is 18 billed hours. Forty percent is 12. The slider will not let you claim that every available hour is billed, because it stops at 90. Even 90 percent of 30 hours is 27 billed hours a week, which is a full book for most independents.
Hold every other default and drop utilization from 60 percent to 40 percent. Working weeks stay 46. Billable hours fall from 828 to 552. The gross stays ₹36,80,000, because income, overhead, and tax did not change. The floor becomes ₹36,80,000 ÷ 552, which rounds to ₹6,667 an hour. The 6-hour day becomes ₹40,000.
Same year, same costs, fewer hours. If you bill 40 percent, ₹4,444 misses ₹24,00,000 unless extra hours show up.
Weeks off move the rate by less, inside the range the form allows. Hold the other defaults and change weeks off from 6 to 10. Working weeks fall from 46 to 42. Billable hours fall from 828 to 756. The floor becomes ₹4,868 an hour, and the 6-hour day becomes ₹29,206. Four extra weeks away matter. They do not matter as much as pretending you bill 60 percent when you bill 40.
Overhead and tax are part of the rate
Overhead is added to the net before the tax gross-up. It is not a percent, and it is not optional in the formula. A year with ₹0 overhead divides only the target net. The default ₹3,60,000 is ₹30,000 a month of costs that do not belong on one client’s invoice as a line you hope they will accept. Software, a room, an accountant, insurance, and the tools you keep between projects sit here.
Tax drag is a flat slice of gross, not a computed return. At 25 percent, every ₹100 you need after tax requires ₹133.33 of invoice, because 100 ÷ 0.75 is 133.33. The tool applies that to net plus overhead together, which is why ₹27,60,000 becomes ₹36,80,000 and not a tax on the net alone.
Move only the tax slider, from 25 percent to 40 percent, and the divisor becomes 0.60. Gross rises from ₹36,80,000 to ₹46,00,000. Hours stay 828. The floor becomes ₹5,556 an hour, and the 6-hour day becomes ₹33,333. If the share you set aside is closer to 40 percent, type that. Leaving 25 because it was the default understates the gross you need.
The field is a planning input. It will not match a filed return line for line. Use it to stop yourself from pricing as if the invoice amount were take-home.
What to put on the proposal
The floor is a year-level number. A single project can be priced above it when the client’s gain, the risk, or the calendar justifies a higher fee. Put that fee on a statement of work template so the price and the scope sit on the same page. The consultant proposal and SOW system is the set of questions, templates, and clauses for that document. The calculator does not write the scope. It stops the fee from being a number you cannot live on.
Use the floor before you discount. A request for 15 percent off a rate that was already the floor is a request to miss the year, unless you will bill more hours than the utilization you typed. If you expect to bill more hours, change utilization and read the new floor. Do not keep the old rate and narrate a busier year you have not had.
A day rate on a proposal should say how many hours the day contains. If you use the tool’s day line, the day is 6 billed hours, and the default day is ₹26,667. If your day is a workshop with a different length, multiply the hourly floor by that length yourself and label the hours. The screen will not do a custom day length.
Questions
How much should a consultant charge?
At least the floor for the year you typed. On the calculator defaults that is ₹4,444 an hour. In the dollar illustration above, the same hours and tax drag with $120,000 net and $18,000 overhead round to $222 an hour.
Does the calculator assume a 40-hour week?
No. The default is 30 hours available a week, 6 weeks off, and 60 percent utilization. That is 828 billable hours in the year.
Why is the day rate six hours?
The tool multiplies the floor hourly rate by 6 and labels the result a quoted day rate. It does not use an 8-hour day.
Can the money fields be dollars?
Yes. The labels say rupees. The math does not convert currency. Enter every money field in one currency and read the rate in that currency.
Is tax drag the same as a tax return?
No. Tax drag is a flat percent of the gross you need to collect. At 25 percent the tool divides income plus overhead by 0.75. It is a planning input.