Estimate a 1099 contractor hourly rate based on target income, expenses, taxes, and billable hours.
Add your desired take-home income, business expenses, and tax reserve, then divide by annual billable hours.
Formula: required gross revenue ÷ billable hours = hourly rate
This is a planning estimate only. Taxes, insurance, benefits, retirement, unpaid time, and business costs vary widely.
It is a contractor rate intended to cover take-home pay, business expenses, taxes, benefits, and unpaid time.
It includes a simple tax reserve percentage, but it is not tax advice.
Contractors usually cannot bill every working hour, so the rate must account for non-billable time.