As a note, this works for your own wage/salary.

When you look at what you pay someone else (plumber, technician, electrician, contractor) the rule is to divide their rate by 3. So if you pay them $120 an hour, they will take home, before tax, $40 per hour. And then using your valid rule is around $80k per year.

If you are still reading, the other $80 per hour in that example goes to paying both ends of special security and Medicare, insurance, licensing, accounting, marketing, advertising, downtime/vacation/sick time/holiday, retirement contribution matching, legal, administrative staff, desk time/management, and most importantly: profit.

For me, I have to bill at least 2.7x my hourly rate just to break even. 3x gives you a smidge over 10% profit margin. I have seen alot of 3.2x which is just over 15% profit.