How many hours will you really bill?
Of all the inputs, billable percentage moves the answer most. The same $95,000 salary needs very different hourly rates depending on it.
| Billable share of working hours | 1099 rate needed |
|---|---|
| 60% | $84.34 |
| 75% (our default) | $67.47 |
| 90% | $56.23 |
| 100% | $50.61 |
The required revenue barely changes. What changes is how many hours you spread it over. Fewer billable hours means each one must earn more.
Why we default to 75%
It is an assumption, not a statistic. Time goes to finding clients, invoicing, learning and gaps between projects. Some calculators assume 100%, which gives $50.61 here, and that only works if every working hour is paid.
How to pick your own number
- Look at last year. Divide hours you invoiced by hours you worked.
- If you are new, start at 60 to 70% and raise it only with evidence.
- Be honest about gaps between clients; they are the most common reason a rate falls short.
Days off matter too
| Days off per year | Billable hours | Rate needed |
|---|---|---|
| 10 | 1,500 | $64.77 |
| 20 | 1,440 | $67.47 |
| 30 | 1,380 | $70.41 |
Count holidays and sick days, not just vacation. A salary pays for them; a contractor does not.
Examples use a single filer in Texas (no state income tax), 40-hour weeks, 20 days off, 75% of hours billed, the QBI deduction, and 2026 federal figures. Your result will differ. Estimates only, not tax advice.
Frequently asked questions
What are billable hours, and why does the calculator assume 75%?
Billable hours are the hours you can invoice to clients. We assume 75% by default because time also goes to finding clients, admin and gaps between projects. Many simple calculators assume 100%. You can change it, or use the switch to match simpler tools.
How many days off should I include?
Count paid time off, holidays and sick days, not just vacation. A salary pays for those days, but a contractor earns nothing on them.