Consulting Day Rate From Salary Calculator
Converting from W-2 to consulting requires raising the rate by 2-3x: pay your own FICA, health insurance, retirement, time off, plus billable utilization. The naive 'divide by 250 days' formula always undersells.
Why W-2 To 1099 Rate Triples Naively
A W-2 salary covers: gross pay, employer FICA (7.65%), health insurance (15-25% of comp), retirement match, paid vacation, sick leave, training, equipment. As a consultant you pay all of this yourself. The naive 'salary / 250 days' formula misses 40-50% of total cost.
Billable Utilization Reality
Top consultants bill 70-80% of working time. Average mid-career consultants 60-70%. Beginners 40-50%. The remaining 20-30% is sales, admin, training, vacation, sick. Setting rate based on 100% utilization is the #1 reason new consultants underprice.
Profit Margin Above Cost
Cost-plus pricing (cover cost + 20-30% margin) is the floor. Market rate based on value-added is the ceiling. Strategy consulting: $2,500-$5,000/day. Technical consulting: $1,500-$3,000/day. Senior fractional executive: $3,000-$8,000/day. Set rate from the higher of cost-plus and market.
Source: Statista Consulting Day Rate Survey 2025, IRS Self-Employment Tax Publication 533. Last updated: May 2026.