As an independent contractor, your rate has to cover far more than your time: taxes, insurance, equipment, software and the hours you spend on work nobody pays for.
Start with what you need
Begin with the yearly income you want to take home, then add your business expenses and an estimate for self-employment and income taxes. That is the revenue the business must bring in.
Count billable hours honestly
Few people bill 40 hours a week. Marketing, admin, invoicing, travel and time off all come out of the year. Many independents bill 20 to 30 hours in a typical week.
Divide, then sanity check
Revenue needed divided by billable hours gives your floor. Compare it with what others charge for similar work, and with the value you deliver to the client.
Consider other models
- Project fees reward speed and experience.
- Retainers smooth out income.
- Percentage models tie your pay to results, common in dispatch.
Our 1099 rate calculator does the math, and the tax set-aside planner shows what to save.
General information, not tax advice. Your CPA can estimate your taxes.
This article is general information, not legal, tax or regulatory advice. Rules change; confirm current requirements with the responsible agency or a licensed professional.
