Accountants Contract Rate (Hourly) Calculator
Estimate an hourly contract rate for an accountant based on target salary, employment costs, overheads, billable hours and profit margin.
Overview
Use this accountants contract rate calculator to estimate an hourly rate that supports your target annual salary, employment-related costs, business overheads, expected billable hours and desired profit margin.
How it works
The calculator adds your target salary, estimated employment costs and annual overheads to create an annual cost base. It divides that amount by expected billable hours to find the cost per billable hour. It then increases the rate so that the chosen percentage of invoiced revenue remains as profit. The day rate assumes eight billable hours.
How to use this calculator
- 1Enter the annual salary you want your contract work to support.
- 2Add employment costs and benefits as a percentage of salary.
- 3Include your expected annual business overheads.
- 4Estimate the number of hours you can realistically bill each year.
- 5Choose a desired profit margin and review the hourly and day-rate estimates.
Example Calculation
Target annual salary
$65,000
Employment costs and benefits
20%
Annual business overheads
$8,000
Billable hours per year
1500
Desired profit margin
20%
Recommended hourly contract rate
$71.67
With a target salary of 65,000, 20% employment costs, 8,000 of overheads, 1,500 billable hours and a 20% margin, the estimated rate is about 71.67 per hour, or 573 per eight-hour day.
Frequently asked questions
How do I calculate an hourly contract rate as an accountant?
Add the annual income and business costs you need to cover, divide by realistic billable hours, then increase the result to allow for your desired profit margin.
How many billable hours should an accountant use per year?
This depends on your workload and time spent on leave, administration, training and winning work. Use invoicing hours rather than total working hours for a more practical estimate.
Should overheads be included in my contract rate?
Yes. Regular costs such as software, professional subscriptions, insurance, equipment and marketing need to be recovered through your client fees.
What is the difference between an hourly rate and a day rate?
A day rate is usually the hourly rate multiplied by the number of billable hours in a working day. This calculator uses eight hours for the day-rate equivalent.
Does the calculator include tax?
No. It estimates revenue, costs and profit using the figures you enter. Tax obligations and allowable expenses depend on your circumstances and location.
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Assumptions and warnings
Assumptions
- The calculation treats your target annual salary as a cost that contract revenue must cover.
- Employment costs and benefits are estimated using the percentage you enter.
- Only billable hours are used; non-billable administration, marketing, leave and training time should be excluded from this figure.
- The selected profit margin is calculated as profit divided by contract revenue.
- Rates, expenses, tax treatment and client demand can vary, so results are estimates.
Warnings
- This calculator provides a general business estimate and is not financial, tax or legal advice.
- Check applicable taxes, insurance requirements, contractual terms and market conditions before setting a client rate.