How Much Should I Charge For My Consulting Services?

Dear Liz,

I have a full-time job, but it’s not interesting work and I won’t move forward in my career doing the kind of work I’m doing now.

I am active in two professional societies and in my networking, I meet people who could use my services as a consultant. I am honest with them. I tell them “I have a full-time job, but I could consult for you part-time in the evenings and on weekends if you are interested.”

Now two of those people are interested in engaging me for a short-term consulting project. I read my company’s employee handbook and it doesn’t say that I can’t consult part-time. I’m about to order business cards and start to take consulting projects.

I am stuck on one thing. I need to set an hourly consulting rate. These two projects will be my first consulting projects ever so I don’t want to set too high a rate, but at the same time I don’t want to charge so little for my time and expertise that my consulting venture will be a waste of time.

How should I decide how much to charge my first two clients?



Dear Misha,

Congratulations on your consulting adventure!

Do not worry too much about undervaluing your consulting work, because your first two projects will teach you a tremendous amount. Later you can increase your consulting rate, but for these first two projects you will be learning on the job, so you probably don’t want to charge top dollar.

You can use Google or any search engine to answer the question “What are typical consulting rates for [service]?” You can contact the folks at the two professional societies you belong to, and ask them about hourly consulting rates for new and experienced consultants in your area of expertise.

You can also use an annual salary to determine your hourly consulting rate. If the kind of consulting work you plan to do is also performed by full-time employees, you will be able to find annual salary ranges on Salary and Payscale, and in annual salary surveys published by one or both of the professional associations you belong to.

Once you know the typical annual salary for someone who performs the same sort of work you will perform, you can calculate an hourly rate for your consulting services. A typical work-year includes about 2000 working hours.

If people who perform the same kind of work you do get paid $100K per year, that works out to about $50/hour ($100,000 divided by 2000 hours).

Independent consulting doesn’t include any employee benefits and few consultants can bank on their ability to bill 2000 hours per year, so you will bump up that $50/hour consulting rate to $75/hour or a little more. These first two clients know that you are new to consulting.

Ask them what they think is a fair hourly rate for your services. As you go forward in your consulting career, you will learn more and more about the market for your services, as well as the cost of the pain you will solve for your clients.

Your first two projects may be the most reasonably-priced consulting projects you will ever take on, but whatever you give up in revenues you will reap in powerful learning!

All the best,


  • Misha-
    I suggest you attend the Lab Quality Confab that will be held in October. You will have all of your questions answered including those you never would have thought of.

  • With 1099 and C2C (you pay all taxes, benefits, expenses) the take home after all that is about 55% of your rate (though you can do far better with a really good accountant and book keeper sometimes). So a $100K job that takes home around $70K, would compare to about $64/hr or $128,000 with 1099 or C2C (in Texas with no state taxes). Of course it if is all expenses like moving included you can wind up making far less if you aren’t careful and you can have real problems with taxes if you don’t hire a good bookkeeper and accountant.

  • Agree w/Liz. One quick question, is your work highly technical w/specific expertise? If that’s the case, it can affect Mkt rates higher.

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