Work out your consulting rate from the bottom up: add your target income, superannuation and business overheads, then divide by the days you can realistically bill, usually 55% to 65% of working days. That's your floor. Then price above it using fixed fees for a defined scope, retainers for ongoing work, or a lower fee plus a share of results when you're confident you can deliver.
Key takeaways
- Your day rate floor is (income + super + overheads) ÷ realistic billable days.
- Fixed fees for a defined scope beat hourly rates, but only if you control scope creep.
- A lower fee plus a percentage of sales only works on 'slam dunk' clients.
- Once you've proven yourself, charge like it. Underpricing kills your motivation.
- Ongoing work belongs on a monthly retainer, which turns consulting into recurring revenue.
One of my first consulting gigs was for a man selling driver fatigue alarms.
What's a driver fatigue alarm? Great question. It's an earpiece that detects if you're nodding off at the wheel. A great device. Saves lives. Brilliant for truck drivers.
The only problem was it was really hard to sell. Nobody wakes up thinking, "I need a driver fatigue alarm." You have to create the demand, and creating demand on a small business budget is brutal.
I agreed to do part-time work for $1,500 a month. I figured part-time meant about a day a week, leaving me the rest of the week for better-paying clients.
I figured wrong.
Part-time turned into basically full-time. Because the product was so hard to sell, I felt obliged to put in more hours. (I treat every project like it's my own business, whatever I'm paid. Great for clients. Terrible for my hourly rate.)
After a month, we parted ways amicably. And I learned the lesson this page is about: don't cut yourself short. If your fee is too low, you won't stay motivated to do the job right, and the client won't get your best work.
So how much should you charge?
How do you calculate a consulting rate?
Start with a floor: the rate below which you're better off in a job.
Day rate floor = (Target income + Super + Business overheads) ÷ Billable days
The number most people get wrong is billable days. You won't bill every working day. You'll spend time on sales, admin, learning, proposals and the client who goes quiet. For most solo consultants, 55% to 65% of working days is realistic.
Worked example: an Australian solo marketing consultant
All figures are illustrative and exclude GST.
- Target income (what you'd want as a salary): A$160,000
- Super for yourself, at the 12% employer rate as a benchmark: A$19,200
- Overheads (insurance, software, accounting, phone, car, marketing): A$30,000
- Total to cover: A$209,200
Working days: 52 weeks, less 4 weeks' holiday and about 3 weeks of public holidays and sick days, leaves 45 weeks × 5 days = 225 days. At 60% billable, that's 135 days.
- Day rate floor: A$209,200 ÷ 135 = about A$1,550
- Hourly equivalent at 7.5 hours a day: about A$207
- Plus GST if registered: about A$1,705 a day
That's the floor, not the price. If your work saves a client A$100,000 a year, A$1,550 a day is a bargain.
Run your own numbers in the Consulting Rate Calculator.
The five ways to charge for consulting
In the book I laid out the order I'd approach it in if I were starting from scratch. Here it is, expanded into the five models.
| Model | How it works | Best when | Watch out for |
|---|---|---|---|
| Free trial | First project free to earn a reference | You have no track record | Clients who never convert, and your own effort fading |
| Hourly or daily rate | Pay for time | Scope is genuinely unknown | Rewards slowness, caps your income |
| Fixed fee | A set price for a defined scope | You can define deliverables | Scope creep |
| Lower fee + % of results | Base fee plus a share of sales or savings | The client is a "slam dunk" | Disputes about what caused the results |
| Equity partnership | Work in exchange for a stake | You've proven yourself and share values | Setup cost and long payback |
1. Do your first job free, as a trial
This sounds odd on a pricing page, but it's how I'd start with no experience. Say to a business owner: I've learned these strategies and I need a business to test them on. Can I try them on yours?
Then treat it like a million-dollar contract. Get there early. Stay late.
I've had plenty of people offer me a free trial. Most start well on day one and fade. They arrive late, leave early and do half a job, because they're not being paid. The rare person who puts in the extra 10% stands out, and at E-Web a couple of them ended up in permanent paid roles.
One trial, one reference. Then start charging.
2. Charge for your time
Hourly or daily rates are easy to explain and easy to start with. Use the formula above so you know your floor.
The problem is that time-based pricing punishes you for getting better. The faster you get, the less you earn. It's even more of a problem in 2026, when AI tools can turn a day's work into an hour.
3. Charge a fixed fee for an agreed scope
I'm a fan of fixed fees for an agreed scope of work. The client knows the cost, and you're rewarded for efficiency.
The challenge is that scope always changes. Write down what's included, how many rounds of changes, what the client must supply and by when, and what happens if they want more. That written scope is what would have saved me from the driver fatigue alarm month.
4. A lower fee plus a percentage of sales
This can be the most lucrative model, and it's the trickiest. Only do it when the client is a "slam dunk." My criteria, shaped by my friend Alexi Neocleous and plenty of experience:
- The product already exists and is selling, ideally digital so the margins are there.
- The client has credibility and some public profile.
- They have a list of at least 5,000 people, ideally buyers.
- They have a social following of a few thousand as a starting point.
- A higher-priced back-end product is already in place.
- They understand the basics of selling online.
- Their core pain is execution. They want to hit it out of the park but can't pull the resources together.
- You're given authority to make decisions within an agreed framework.
If most of those are missing, you're not a partner. You're an unpaid employee hoping for a bonus.
Measure the share against a baseline, such as sales above the average of the previous three months, so you're paid for the lift you create, not for sales that would have happened anyway.
5. Join as an equity partner
The super-advanced option: take a stake in the business in exchange for the marketing work. At E-Web we did a few of these deals and they were brilliant, because both sides' interests are aligned.
But they're expensive to set up (a company, a shareholders' agreement, bank accounts, finance), and you must share values with your partner. Only try this after you've done good paid work for others, and get legal and tax advice first.
Calculate your consulting rate
Enter your income target, costs and billable days in the free Consulting Rate Calculator to get your day rate, retainer price and success-fee options.
How often should you raise your consulting rates?
More often than you think.
At E-Web Marketing, we raised our setup prices nearly every year between 2004 and 2011. Over that time the business won the Deloitte Fast 50 award, for the fifty fastest-growing companies in the region, five years running.
| Setup fee | 2004 | 2008 | 2011 |
|---|---|---|---|
| Economy | $495 | $1,995 | $4,990 |
| Business | $1,495 | $3,995 | $7,490 |
| Executive | $2,495 | $5,995 | $9,990 |
The value clients received went up too. That's the point. Raise your prices as your results improve, and give notice to existing clients. My guide on how to raise prices without losing customers covers how.
Why most consultants should move to a retainer
Here's the connection to The Subscription Playbook.
A consultant who sells projects starts every month at zero. Feast or famine. I lived that in my first business, and I don't recommend it.
A consultant with retainers starts every month with revenue already booked. Once a client trusts you, turn the ongoing part of the work into a monthly fee for a defined service: a set number of days, a monthly report and planning session, or "everything in this scope, every month."
Using the worked example above, two days a month is about A$3,100 a month. Ten clients like that is A$31,000 of monthly recurring revenue before you sell a single project.
There's more on how to structure this in retainers vs subscriptions for service firms, subscriptions for consultants and coaches and value-based pricing for service businesses. If you build AI agents or automations, read how much to charge for building AI agents.
The Australian money questions
As at October 2026, three things to check:
- GST. Once your GST turnover reaches A$75,000, the ATO says you must register and charge 10% on taxable sales. Quote business clients ex-GST.
- Personal services income. If most of your income comes from your personal effort for one or two clients, the ATO's personal services income rules may limit the deductions you can claim. Your structure matters.
- Cash flow. Ask for a deposit on projects and bill retainers monthly in advance, so you're never funding a client's work.
This is general information, not tax advice. A registered tax agent can tell you how it applies to you.
Free Subscription Profit Review
Australian business owners can book a free 30-minute review with a BPAG Accountants adviser. An honest conversation about:
- whether a subscription model could work for your business
- how recurring revenue could cover your fixed costs each month
- how it could lift what your business is worth
No cost, no obligation. General information only until we understand your situation.
When is consulting the wrong move?
When you'd rather be building your own product. Consulting pays well but it doesn't scale like a subscription business. Use it to fund and learn, not as a trap.
When you're competing on price. If the only reason a client picks you is that you're cheapest, they'll leave for someone cheaper.
And when you can't say no. Scope creep is a pricing problem dressed up as good service.
What to do next
- Calculate your day rate floor with the formula, honestly.
- Turn your most common project into a fixed-fee package with a written scope.
- Offer every finished project a monthly retainer for the ongoing work.
- Raise your rates for new clients now, and for existing clients at renewal.
- Only consider a percentage deal if the client ticks most of the eight boxes.
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Download it freeFrequently asked questions
Should I charge hourly or a fixed fee as a consultant?
Fixed fees for a clearly defined scope usually work better for both sides. The client knows the cost and you're rewarded for working efficiently rather than slowly. Hourly suits work you genuinely can't scope, such as open-ended advice or emergencies. If you charge fixed fees, write down exactly what's included, how many revisions, and what triggers a change request.
How do I raise my consulting rates with existing clients?
Give notice, explain the added value, and apply the new rate from a set date, ideally at renewal. Many consultants raise rates for new clients first, then move existing clients up over six to twelve months. Pair the increase with something clients value, like faster turnaround or a monthly report. My guide on raising prices without losing customers has templates.
Do I charge GST on consulting fees in Australia?
If your GST turnover is A$75,000 or more, you must register for GST and generally charge 10% on your fees to Australian clients. Below that, registration is optional. Quote business clients ex-GST and show GST separately on invoices. Services to overseas clients can be GST-free in some cases, so check the ATO's rules or ask a registered tax agent.
What should a consulting proposal include about price?
The outcome you're delivering, the scope, the timeline, what the client must provide, the fee and payment terms, and what happens if scope changes. Offering two or three options (for example, a diagnostic only, the diagnostic plus implementation, or implementation plus a monthly retainer) lets clients choose how far to go instead of deciding yes or no.
How much do AI tools change what consultants can charge?
They make hourly billing harder to defend, because work that took a day may now take an hour. That's an argument for pricing on outcomes and fixed scopes, not for cutting your income. Clients still pay for judgment, accountability and results. If you build AI agents or automations for clients, see my guide on how much to charge for building AI agents.
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Robert Coorey, MBA
Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.
Sources
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.