Hourly IT Consulting Rates, 2023: How to Get the Most for Your Money

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If you want to NET $100,000 per year, you’ll need to charge double that amount — or $178 per hour. If you want to make at least $100,000 a year as a consultant, how much do you have to charge? As an employee, you need an hourly wage of $48-$50 an hour to make $100,000 per year. They also spend a huge portion of their time looking for consulting clients. Before you even enter the negotiation phase with your first clients, there are several factors to consider when deciding how much to charge for consulting. Accounting consultants, who should also be CPAs, can charge between $150 and $450 an hour.

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If hourly rates seem like too little income for your hours worked, a monthly retainer might be just what you consider for your pricing structure. One of the key benefits of a monthly retainer is that you can create contracts monthly to help you plan better for your income. When comparing the average hourly rates to a monthly fee structure, you’ll likely earn more consulting fees overall for a monthly retainer. You could include your hourly consulting fees for a weekly meeting, a set amount of work you’ll complete, and support on consulting projects. The hourly rate of a brand-new consultant is probably closer to $60-$75 an hour.

• However, you don’t want to price yourself out of potential work.
• If you don’t believe that you have the qualifications, skills, and talents to live up to the promises you’re making, clients will smell your insecurity a mile away.
• By following these tips, you’ll be able to negotiate consulting rates that work for both you and the client.
• Having the right skills and experience is more important than education – the difference between people who finished only high school and those with Doctorates is negligible, being only $2.
• The most profitable industry is the Legal field, with all 5 of its listed jobs being in the top 5 best paying freelance jobs.
• A number of factors influence that, including the scope of your work, your experience, and the competitive landscape.

As you might expect, the majority of consultants (80.23%) want to increase their fees. Clients are often willing to pay a premium for consultants who have demonstrated expertise in their industry. It sends all the wrong signals to the client about the value you can add to their business. 50% of consultants do not offer productized consulting but are interested in doing so. If you want to build a predictable, profitable, scalable consulting business with premium pricing, then our new Consulting Fees Multiplier mini-course is for you.

Believe in Your Value and the Right Price Will Follow

Analyzing the same survey, France is the country with the highest hourly rates, with United Kingdom as a close second; the country that has the lowest hourly rates for developers is Kenya, with $25/hour. For example, if you’re a data science consultant who’s helping clients understand their data better, there are several ways your services can improve their bottom line. They may save on employee hours, make more profitable decisions, and more. When you negotiate with a potential client, make them understand how your consulting services will affect their bottom line.

Whichever path you choose, you’ll need to know how to calculate your rates. Don’t compare yourself to the industry thought leaders who were featured in Forbes (unless you’re one of them!). At the same time, don’t undercut yourself simply because you’re new at this. You can take steps to protect your organization from economic issues.

Then, you can determine the salary you want to grow into, and choose the best pricing model to get there. Use the details within your CRM to explain rate changes to your clients. Being able to point back to specific projects, accomplishments, or events can help you establish credibility and support your argument––making it more likely your clients will agree to pay you more money. A monthly retainer is also a great option if a company wants to have you on-call for on-demand advice or help. They’re essentially pre-purchasing a certain amount of time each month.

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This will automatically calculate your pre-expense, pre-tax hourly rate for you. In other words, this is the hourly amount you can expect in your pocket. Because rates depend on so many different factors, such as your work area or your years of experience, consulting rates can vary dramatically. You’ll need to put in a little work to discover what consultation hourly rate price is right for you. Whether you’re new to the game or you’ve been offering consulting services for decades, the freedom of valuing your time however you see fit can feel overwhelming. Tateeda Global is a custom software development company that helps clients create complex software and IoT solutions for medical and health-tech projects.

There are a lot of things to keep in mind when you create your consulting rate. It can be tricky to balance all of the factors we’ve outlined above, but there are a few steps you can follow to ensure an optimal pricing structure for you and your client. To maximize the profitability of your consulting projects, create a clear outline of the various tasks included within a project, and estimate the amount of time it will take you to complete each one. Add up the total, multiply it by your hourly rate, and tack on an extra 15% to 20% to account for unexpected items . Search the websites of people offering similar services to yours.

Say you want to make $50,000 a year after expenses and taxes. Dividing that by 12, our spreadsheet determines that you’d need to make $4,166.67 a month. If you have 140 billable hours a month, your hourly take home rate would be $29.76. One of the most challenging parts of running a consulting business is setting your rates.

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Though, if you need a high-level technical specialist, it’s better to work with IT consultants. They’re often more experienced and have in-depth tech expertise in specific areas. For example, fraud prevention by means of AI in the FinTech product. Some companies prefer working with software developers, others looking for professional IT consultants. Both of these options are fine, while you get a high-quality service that matches your requirement.

If you’re ready to make the leap to consulting full time, but you’d like to maintain your current cost of living, you need to determine the cost of doing business. To do that, the colloquial advice is to charge roughly three times what your current hourly rate is. Finding the right consulting rates can take some trial and error. Almost every consultant has over- or under-charged for their time when trying to figure things out, so don’t stress about it too much. For example, some consultants choose to readdress their consulting rates each year.

How to calculate your hourly consulting rate

If you charge too little, potential clients won’t see you as a “bargain,” they will see you as an “amateur.” For example, a client’s budget might not be able to afford you. Instead of altogether rejecting the client , steer the client towards negotiation. Understanding what the client needs play a major role in how you price or whether you want to move forward at all. Toss out a number too early, and it might be hard to change it later if the project evolves. Do your research and prepare yourself with the rates we outlined above, and you’ll be ready and adaptable going into any conversation.

Consultant Hourly Rate: How to Set Your Consulting Rates

Once you’ve set your rates or hourly fee and you’re ready to attract and serve new clients, you need an online presence that makes it seamless. B12 is the all-in-one solution for consultants and other service providers to launch a professional online presence and sell services with less effort. Consultants love these because they’re a set amount of money you can rely on each month, and clients appreciate knowing that they’ve reserved your time on an ongoing basis. However, clients can be wary of agreeing to a monthly retainer before they’ve seen your work.

If you’re really good at what you do, don’t short change yourself by pricing yourself too low just to get business. This can pose a challenge as you try to get higher-paying clients. In addition, the fee structure for IT consultants varies from one consultant to the next. Some may charge per project, some may charge a tech consultant hourly rate, some may charge a daily rate, and some may work on a monthly retainer. Many IT consulting firms specialize in certain industries, such as healthcare, fintech, automotive, and other specialty industries.

Every time you successfully complete a project, increase your hourly rate by $25. You set an hourly rate, track your hours, and then bill your client by the hour. When making your calculations, feel free to play with the numbers to satisfy the lifestyle you want. As a consultant, you’re not getting paid for vacation or maternity leave, so you’ll need to factor this time into your rates. For example, let’s say you wanted to make a gross salary of $60,000 per year.

Knowing how much to charge for your consulting fees is just half the battle. Now, it’s time to learn how to communicate your prices with clarity and confidence. While we’ll get into average consultant salaries and consulting rates by industry later, these are just averages. They can influence your decision-making, but your ultimate price point is entirely up to you.

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According to Glassdoor, one of the world’s largest job sites, Java consultants get $40/h on average. The table shows that men outearn women for $3 on average across industries – the only two industries where the difference is minimal ($1) are Design & Multimedia and Writing & Translation. The biggest difference ($14) is in the field of IT & Programming, where men earn $31 and women $17. Education can be an important factor for clients who are looking to hire a freelance, but the most recent Payoneer report shows that clients actually value experience and competence more than education. According to the Payoneer survey, which covered 150 countries and over 7,000 freelancers around the world, freelancers on average make $21/hour. So, if you think a project will take you 50 hours, quote your going rate for 60 hours instead.

In other words, you pay for the result and outcomes the consulting company creates for you. Generally, IT consultants charge 10% of the value of what they’re providing. IT consulting prices start from $125 to $175 per hour, with the project cost from $50,000 to $5 million. While IT consultants in the United Kingdom charge $100 per hour, Ukranian specialists charge less for the same service. For instance, Cleveroad is also a medium-size software development company, but you will pay from $25 to $50.