Setting your consulting rates can be tricky because they usually depend on your niche and experience.

Let’s explore how pricing your services works as a consultant and what to charge in your specific area of expertise.

Note: This article is for informational purposes only and should not be considered financial advice.

4 Models for Pricing Your Consulting Services

When people think of consultants, they often assume an hourly rate. While this pricing structure is typical, it’s not the only one.

You can also charge for the following:

• Per project: With project rates, you set up an agreement with pre-determined deliverables. Anything outside of this project’s scope can be billed at your hourly rate or a separate pre-determined rate.
• Per day: Charging per day is similar to charging per hour since working days tend to have a set number of hours. However, it allows you to focus an entire day on a single client while getting paid for 4-8 hours.
• Retainer: This is a recurring pricing strategy. You can set your retainer rates based on a specific number of deliverables or monthly hours. The retainer model works great for consultants who offer services that need continuity.

Alternatively, you can stick to an hourly model when clients need you in short bursts.

There’s no perfect model for your consulting rates. It ultimately depends on how you want your product perceived, premium or affordable. How you deliver your services and your personal preference will tell what’s best for you.

Typical Payment Terms for Consultants

As a consultant, you can charge in advance, upon project completion, or split your fees in between.

Even if you charge hourly, you can charge for a set number of hours upfront and then bill the rest at the end of the week or month. You must ensure your terms are clearly explained in your consulting agreement.

Some consultants work with companies with a net-15, net-30, or net-60 payment term. This means that in the company’s system, invoices are scheduled for payment after a set number of days upon receiving the invoice (15, 30, and 60, respectively).

However, remember that you’re in charge of your own consulting business. If you disagree with a company’s payment terms, you can negotiate your contract details with them. Many consultants don’t start their work until they receive at least a percentage of the payment upfront.

Consulting Rates by Industry

Use the following examples as a ballpark number to figure out your own consulting rates. Note that these rates may vary based on your business location and the market you’re in.

1. Social Media Consulting Rates

Beginner social media consulting rates start at $50 to $75 per hour. You can charge much more if you can showcase a return on investment from your previous clients.

2. IT Consulting Rates

As an IT consultant, you shouldn’t charge less than $85 to $125 per hour. These rates can increase if you have an in-demand niche like cloud computing (e.g., a cloud monitoring service), business VOIP services, or AI.

3. HR Consulting Rates

HR consultants can charge between $50 and $150 an hour.

4. Engineering Consulting Rates

Engineering consultants make an average of $75 to $125 per hour. 

5. Software Consulting Rates

Software consulting rates depend on the type of software development you offer and the type of clients you serve. Fullstack Labs breaks down six types of custom software consulting companies and their varying rates:

• Enterprise-class: $385-$850 per hour
• Big business class: $220-$330 per hour
• Mid-market class: $110-$220 per hour
• Small class: $82-$137 per hour
• Experienced freelance developers: $100-$300 per hour
• New freelance developers: $50-$75 an hour

6. Management Consulting Rates

Management consultants have consulting billing rates that range between $100 to $350 an hour.

7. Diversity Consulting Rates

If you consult clients for diversity training, you can charge between $150 to $250 per hour.

8. Project Manager Consulting Rates

Project managers charge average consulting fees of $70 to $150 per hour.

9. Nonprofit Consulting Rates

On average, nonprofit consultants charge between $85 to $150 per hour. 

10. Machine-Learning Consulting Rates

As a machine-learning consultant, you can charge clients between $250 to $350 per hour.

11. Cyber Security Consulting Rates

A cyber security consultant can charge between $225 to $300 an hour.

12. Accounting Consulting Rates

Accounting consultants, who should also be Certified Public Accountants (CPAs), can charge between $150 and $450 an hour.

13. Marketing Consulting Rates

Marketing consultants charge at least $100 an hour on average but can bill upwards of $1000 per hour depending on the type of marketing they help clients with.

14. SEO Consulting Rates

You can make between $75 and $100 per hour as an SEO consultant.

15. Product Management Consulting Rates

Consultants who help clients with product management can charge between $175 to $250 per hour.

16. Data Science Consulting Rates

If you specialize in data science, you can make an average of $200 to $350 per hour.

Need help creating a template for your upcoming consulting invoices? Check out our guide and download our free template.

How to Negotiate Consulting Rates

There are a few factors to consider when setting and negotiating your rates with a client.

Many consultants default to charging the same hourly rate they had when they were employees. However, employees have benefits that consultants don’t. Plus, consultants pay their own taxes and spend much of their time looking for clients. 

Let’s put things in perspective.

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.

Now, let’s figure out how much time you’ll actually spend working with clients. If you want a good idea of what you’ll do in a day as a consultant, check out this post.

On average, every year has about 250 working days. We assume you want at least some vacation and holidays. So, let’s shave 15 days from that total and you’re left with 235 working days. 

However, it’ll be impossible for you to consult with clients for 8 hours a day during all 235 days. Just to be safe, let’s remove two days out of five. You’ll likely spend those days doing admin work and finding new consulting clients.

Now, you have 141 business days left.

If you divide 100,000 by 141, you get:

$709 per day, MINIMUM. That’s a rate of $89 per hour.

However, this rate doesn’t account for your expenses, taxes, and insurance. If you want to NET $100,000 per year, you’ll need to charge double that amount — or $178 per hour.

You may have a different goal. Perhaps you’re just starting and don’t have enough experience to charge that much — or maybe you’re highly experienced and want to make at least $200,000 per year! 

Customize this equation based on your own situation. This will be your minimum acceptable rate.

Next, you must decide what consulting rate model you want to use. If you’re pricing per project, you’ll need to calculate how many hours that project will take you and add an additional 20% to be safe. 

So, if you think a project will take 50 hours, quote 60 hours instead.

But how can you convince clients to pay you that much? It’s all about their perceived value of your services.

When you negotiate with a potential client, make them understand how your consulting services will affect their bottom line. Explain how your consulting rate will get them a return on their investment.

For example, if you’re a data science consultant helping clients understand their data better, there are several ways your services can improve their bottom line. For example, they may save on employee hours or make more profitable decisions.

But it’s your job to make your potential clients see your value. When clients see your consulting rates as an investment, not an expense, you can charge high rates without pushback. 

Remember that your starting rates don’t have to remain your rates forever. Once you have a solid track record of results for your clients (and sufficient demand for your services), you can increase your rates upwards of $500 per hour.

Don’t believe us? Just take a look at Laura Belgray’s now retired 1-on-1 copywriting consulting rate pages. She charges $1450 for a single hour of her time and $10,000 for an entire day. If your consulting services can help clients make bank, they should pay you more.

Set Strategic Consulting Rates for Your Business

Remember that consulting rates shouldn’t be a decision you make on the fly. You need to account for your revenue goals, expenses, the time you want to spend working with clients, and the value you provide your clients. 

No matter what consulting fees you charge, you’ll be able to spend more billable hours with clients when you’re not bogged down on the admin side of things. Try Paperbell for free to start spending way less time on admin work and way more time getting results for your high-paying clients!

Editor’s Note: This post was originally published in July 2022 and has since been updated for accuracy.