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LucasArthur
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SimplyReplica, post: 191670 wrote:
Oh Boy,

What an interesting question with many variables as an answer..

There are some apparent formulas… i would love to advise more thoroughly, although one popular outline (if you are not trying to benchmark against competition – which i am sure you are not or you would have a rate already) would be like below, and assuming you are the only income generator:

Step 1: Add all your anticipated expenses for the year together (office, car, fuel, stationary, staff, etc etc) : lets say \$100,000

Step 2: Add your expected annual salary to Step 1 (include taxes, super, etc): lets say \$100,000

Step 3: Add in any other costs you may have or savings goals or buffers for contingencies… :lets say \$20,000

Step 4: Add Step 1, 2 and 3 together. Equals Total: Lets say \$220,000

Step 5: Divide Total from step 4 by 52 (weeks): \$4,230 per week is needed to cover costs in step 1,2 and 3

Step 6: Divide Step 5 answer by how many hours you want to work – or think can work: lets say 40 hours. Lets do it… \$4,230 / 40 = \$105.76 per hour

Please note: i am basing this on your forum title – CONSULTING CHARGE OUT RATES and assuming all your income is from consulting… This would mean if you want to turn over \$220k per annum to cover your anticipate costs and wages and only want to work a leisurely 40 hours per week, you must clear \$105.76 per billable hour to cover all of this…

Hope that helps and not confuses.. but there are lots more professional people here that could have a better input 😮 i get a little distracted at times..

Cheers
Jason

Uh Oh,

I knew i would overlook something.. As an alternative, you may want to amend step 5 and divide by 48… Reasoning, if you aint figured it, is just in case you dont want to go crazy and take holidays for yourself ..

Amended outcome…
Step 5: \$220,000 divide by 48 = \$4583.33

Step 6: \$4,583.33 divide by 40 = \$114.58 per hour needed..

Apologies for not giving you any time off

Jason

Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888