Jerry Weinberg, in The Secrets of Consulting, recommends charging about 4 times the hourly rate that you want to make. Thus, if you think you could live on $40

Jerry Weinberg, in The Secrets of Consulting, recommends charging about 4 times the hourly rate that you want to make. Thus, if you think you could live on $40/hour (about $80,000 a year), you need to charge about $160 an hour. This gives you the buffer that you need for unplanned downtime (illness, early termination of contracts, lulls in business) and planned downtime (vacation, training, business development activities). While you could argue the exact proportion, I think this is good advice, based on my experience as a consultant.