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’s about $117,600 of revenue needed. Over 1,500 billable hours (30/week × 50 weeks) that’s roughly $78/hour.

Because you don’t bill every hour you work, and your rate has to fund the whole business, not just your paycheck. Driving, quoting, invoicing, and slow days aren’t billable, and overhead (truck, insurance, tools, software) plus profit ride on top — so a $35/hour take-home often needs a $75–90/hour charge rate.

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/hour and plumbers $45–150/hour, 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.