A single rate hides operating risk
Your quote floor is not one universal market truth. It is the minimum price supported by a particular set of operating assumptions. A 70% billable year may be reasonable while client work is steady, but the same price can fail if utilization falls to 60% or costs rise. A scenario comparison makes that exposure visible before you promise a rate to a client.
Keep the income goal and shared financial assumptions fixed. Then vary only the conditions you are genuinely uncertain about: time off, billable utilization, and variable overhead. The spread between the three hourly floors is the price of that uncertainty.
Worked example: protecting an $80,000 take-home goal
The default comparison above holds an $80,000 take-home goal, 40 weekly working hours, a 28% tax set-aside, no fixed costs, and a 15% day-rate premium constant. The base plan produces 1,344 annual billable hours and $133,333 of required revenue, so its exact floor is $99.21 per hour and its rounded quote is $100.
The risk-buffered plan allows six weeks off, assumes 60% utilization, and sets aside 15% for variable overhead. It has only 1,104 billable hours and needs $140,351 of revenue. The rounded floor rises to $128 per hour. The high-utilization plan produces 1,568 billable hours with lower overhead, reducing the rounded floor to $81.
How the driver explanation works
For each non-base plan, RateFloor changes one scenario variable at a time while holding the other two at base values. It calculates the hourly effect of weeks off alone, utilization alone, and variable overhead alone. The largest absolute movement is named as the leading modeled driver.
This is a transparent sensitivity check, not a forecast and not a claim that the variables are independent in real life. A slower sales period can reduce utilization and change spending at the same time. Use the explanation to identify the first assumption worth verifying in your records.
Formula, boundaries, and limitations
Each column uses annual billable hours = (52 - weeks off) x weekly hours x billable utilization. Required gross revenue = (target take-home + fixed costs) / (1 - tax set-aside - variable overhead). The exact hourly floor is required revenue divided by billable hours. The client-facing hourly quote rounds upward, and the day rate uses the full working day plus the selected premium.
The planner rejects zero or negative income, impossible weeks, utilization below 10% or above 100%, and any tax plus overhead combination that leaves less than a 15% remainder. These are calculation safety boundaries, not recommended business targets.
Tax is only an editable cost factor for pricing. This tool does not estimate tax liability, demand, close rate, project scope, benefits, currency conversion, or the price a client will accept. Use your own records and qualified advice for assumptions with legal, accounting, or tax consequences.