Contractor hourly rate calculator

Add the pay you want plus your annual overhead, divide by the number of hours you actually bill in a year, and add a profit margin. For example, 70,000 pay + 30,000 overhead = 100,000; with a 15% margin that is about 117,600 of revenue needed. Over 1,500 billable hours (30/week × 50 weeks) that is roughly 78 an hour.

Because you do not bill every hour you work, and your rate has to fund the whole business, not just your paycheck. Driving, quoting, invoicing and slow days are not billable, and overhead — truck, insurance, tools, software — plus profit ride on top. A take-home of 35 an hour often needs a charge rate of 75 to 90.

Most solo and small contractors bill 25–35 of a 40+ hour week once you subtract driving, estimates, admin and downtime. Using 40 billable hours in your rate math is the classic mistake that leaves you underpriced.

It varies by trade and market — electricians often run 40–100 an hour and plumbers 45–150, for example — but the right number for you is the one that covers your pay, your overhead and your profit at the hours you actually bill. This calculator works it out from your own numbers instead of a market average.