Work out the hourly rate needed to reach a take-home income target, from billable hours, working weeks, business expenses and an estimated tax rate.
The calculation adds the take-home income target and annual business expenses together, then grosses that total up by the estimated tax rate — dividing by one minus the tax percentage — to give the gross revenue that must be billed. Dividing gross revenue by total billable hours (billable hours per week multiplied by working weeks per year) gives the required hourly rate. The reverse calculation multiplies an entered hourly rate by the same billable hours to project annual gross revenue. All figures are estimates based on editable assumptions; this is a planning calculation, not tax advice, and real tax depends on individual circumstances and jurisdiction.
Is this calculator tax advice? No. The tax percentage is a rough planning assumption entered by the user, and the results are estimates for setting a rate. It is not tax advice; a qualified accountant can advise on actual tax obligations.
Why are expenses added before grossing up for tax? The income target is a take-home goal, and expenses must also be covered out of billed revenue. Adding both together before applying the tax gross-up gives the gross revenue that leaves enough to cover expenses and still reach the target after the estimated tax.