How consultants usually bill
Consulting fees come in three main shapes, and many consultants combine them:
- Retainer — a fixed monthly fee for a set amount of time or availability. Invoice it at the start of the month.
- Hourly or daily — billed in arrears with a summary of hours. Common for advisory work that's hard to scope.
- Project fee — a fixed price for a defined result, often split into a deposit and milestones.
Whichever you use, name the statement of work (SOW) or contract on the invoice. In larger companies the invoice is matched against it before it's paid.
Example consulting invoice
| Line item | Qty | Rate | Amount |
|---|---|---|---|
| Monthly advisory retainer – November (SOW #2026-04) | 1 | $4,000.00 | $4,000.00 |
| Additional hours beyond retainer – market sizing workshop | 6 | $175.00 | $1,050.00 |
| Travel: round-trip airfare to client office (receipt attached) | 1 | $386.40 | $386.40 |
| Travel: hotel, 2 nights (receipt attached) | 2 | $189.00 | $378.00 |
| Total | $5,814.40 |
Billing expenses
If your agreement lets you bill expenses, list each one on its own line with what it was and mark it "receipt attached". Bill them at cost unless your agreement says otherwise. Many companies have travel policies — economy flights, hotel limits — so check them before you book, or the expense may not be approved.
If your agreement doesn't let you bill expenses, you can still deduct them as business expenses on your tax return.
Getting large invoices paid on time
Corporate clients often pay on 30, 45 or even 60-day terms, and only when everything matches. To avoid delays:
- Ask for the purchase order number before your first invoice and put it in the PO field.
- Get set up as a vendor early — it can take weeks.
- Send invoices to the accounts payable address and copy your contact.
- Keep hours summaries short and clear: date, hours, what you did.
Tax notes for consultants
Consulting income is self-employment income, so you owe self-employment tax and income tax and should make quarterly estimated payments. Consulting is one of the "specified service" fields for the qualified business income (QBI) deduction: at higher incomes — taxable income above $201,750 for single filers in 2026 — the deduction shrinks faster and then disappears. Tick the "specified service" box in our 1099 tax calculator to see the effect.
Frequently asked questions
Should I bill a retainer in advance or in arrears?
Usually in advance — the client pays for your availability at the start of the month. Extra hours beyond the retainer are billed in arrears, on the next invoice.
How detailed should the hours breakdown be?
Enough for your client to approve it: date, hours and a few words about the work. Attach it as a separate page or put it in the notes for small invoices.
Do I need to charge sales tax on consulting?
In most states, consulting services aren't subject to sales tax, but some states tax certain professional services. Check your state's rules.
Can I invoice in my client's currency?
Yes. Choose the currency in the Options section. The set-aside tax estimate only appears for US-dollar invoices.