Your rate is the income you need, grossed up for tax, costs and leakage, divided by the hours you can honestly bill. Enter your own numbers below. The result is a floor, not a ceiling. The reasoning behind each step, and what to do when the number lands above your local market, is in how much to charge for piano lessons.
How the number is built
- Target take-home. The money you keep from teaching after business expenses and self-employment tax, before income tax.
- Self-employment tax. 15.3% applied to 92.35% of net profit is an effective 14.13%, so the target is divided by 0.8587.
- Business expenses are added on top.
- Leakage. Card processing runs about 2.9% plus 30 cents per charge and some late cancels are never recovered; the default 6% covers both. Set it lower if families pay by bank debit and your policy is enforced.
- Billable hours are teaching weeks multiplied by lesson hours per week. Be honest here; this is the step most teachers get wrong.
- Divide, then round up to the nearest dollar.
Shorter lessons are not priced as simple fractions. Every lesson carries roughly 10 minutes of setup, notes and admin, so a 30-minute lesson is priced at about 57% of the hourly rate and a 45-minute lesson at about 78%. That keeps your effective rate the same at every length.
Your rate sheet
Print this page, or copy the block below into the email you send when a family asks.
[Studio name] — tuition from [month, year]
| Lesson length | Per lesson | Per month (12 installments) | Per month (10 installments) |
|---|---|---|---|
| 30 minutes | |||
| 45 minutes | |||
| 60 minutes |
Tuition is an annual fee for 40 weekly lessons, paid in equal monthly installments. It is not a per-lesson charge, so four-lesson and five-lesson months cost the same. Cancellation and make-up terms are in the studio policy.
Worked example
Maria teaches from home, wants $50,000 in her pocket, and has roughly 30 students. The figures are illustrative, not a benchmark.
| Step | Calculation | Result |
|---|---|---|
| 1. Target take-home | Chosen | $50,000 |
| 2. Self-employment tax | $50,000 ÷ 0.8587 | $58,227 |
| 3. Business expenses | + $2,900 | $61,127 |
| 4. Leakage gross-up | $61,127 ÷ 0.94 | $65,029 |
| 5. Billable hours | 40 weeks × 22 lesson hours | 880 hours |
| 6. Hourly rate | $65,029 ÷ 880 | $74/hour |
If Maria matched a $60 "average" instead, she would need 1,084 lesson hours to keep the same $50,000 — 27 hours of lessons a week, every week, for 40 weeks.
FAQ
What if the rate is higher than teachers near me charge?
That is the normal outcome, not a broken formula. Close the gap over two years in two increases of roughly 13%, change the mix toward longer lessons, or lower the income target deliberately. Absorbing the gap and hoping volume fixes it is the one option that costs you evenings.
Should the leakage number include my cancellation policy?
Only the part you do not recover. If late cancels are charged under a written policy, leakage is mostly card fees, around 3%. If you reschedule almost everything, 6–8% is closer to reality. The cancellation policy template is the cheapest way to move that number.
Why is a 30-minute lesson more than half the hourly rate?
Because every lesson carries the same 10 minutes of setup, notes, parent conversation and invoicing whether it runs 30 or 60 minutes. Pricing 30 minutes at exactly half means your beginners are quietly subsidized by your advanced students.
Sources
- Internal Revenue Service, Topic no. 554, Self-employment tax: 15.3% rate; "the amount subject to self-employment tax is 92.35% of your net earnings from self-employment." https://www.irs.gov/taxtopics/tc554 (checked 2026-09-10)
- Stripe, pricing: 2.9% + 30¢ per successful domestic card transaction; ACH Direct Debit 0.8% capped at $5.00. https://stripe.com/pricing (checked 2026-09-10)
Written for teachers by the LessonCadence team. Last reviewed: 2026-09-10.