Labor rate

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What a contractor charges per hour of work. It carries their pay, their overhead, and profit, not just wages.

The labor rate is the hourly number used to price a job, and it is much more than take-home pay. It includes the hours you cannot bill (driving, estimating, paperwork), the overhead of the business, and a profit on top. A rate built from wages alone is why contractors work sixty hours and have nothing at the end of the month.

Build it from the bottom: what you need to take home, plus overhead, divided by the hours you can really bill, plus profit. The hourly rate calculator on this site does the arithmetic.

Related: Overhead · Markup · Time and materials

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