Working backwards from your target income, factoring in real-world utilization, expenses, and time off. The math most consultants don't do until tax season.
Your minimum day rate
$1,242/day
To take home $120,000/year working 46 weeks at 60% utilization with 20% overhead and 30% tax.
Hourly equivalent
$155/hr
Billable days/yr
138
Required revenue/yr
$214,286
Required revenue/mo
$17,857
Day rate by target take-home (60% utilization, 20% overhead, 30% tax, 46 weeks)
A quick reference. Adjust the inputs above for your actual situation.
The trap most new consultants fall into: take their old salary, divide by 250 working days, and call that their day rate. Three things break that math:
You're not a 100% utilized FTE anymore. Selling, admin, learning, marketing, dead time between gigs - that all has to be paid for by billable days.
You pay BOTH halves of payroll tax now. Self-employment tax is 15.3% on top of income tax in the US. The equivalent gap exists in most countries.
Overhead is real. Tools, subscriptions, accountant, insurance, marketing, coworking, equipment refresh. Easily 15-25% of revenue.
The honest math: a consultant who took home $120K W-2 needs to bill at roughly $1,100-1,300/day to take home the same amount as an independent. The good news is that the same skills can usually charge it - clients are already used to paying that rate to the firms.
Frequently asked questions
What is a typical consulting day rate?
Wildly variable. Junior independent consultants in tech: $400-700/day. Mid-career: $800-1,500/day. Senior or specialist: $1,500-3,500/day. Strategy/management consulting: $1,500-5,000/day. The number that matters is what YOU need to hit your income target - which is what this calculator answers.
Should I charge by the day or by the hour?
Day rates are usually higher than the equivalent hourly rate because clients are 'reserving the day' even when they don't fill it. Day rates work for engagements where the client expects you available. Hourly works better for short, sporadic, or task-based work.
What is billable utilization for consultants?
The percentage of your working hours that you can actually invoice. Solo consultants: 50-65% is realistic. The rest is sales calls, admin, marketing, learning, dead time. New consultants are often shocked by how low this is - they assume 80% and price accordingly, then under-earn.
How do I price my first day as an independent consultant?
Take your last full-time salary, divide by 220 (working days/year minus vacation), then multiply by 1.7-2.0. The multiplier covers your overhead, taxes, and the gaps between gigs. So a $120K salary translates to roughly $930-1,100/day as a starting independent rate.
How does Yuzen help consultants?
Two ways. First, voice entry after a call captures next-step notes before they fade. Second, the pipeline view surfaces overdue followups so prospects do not go cold during heads-down delivery weeks - which is the single biggest leak for solo consultants.