Contractor hourly rate calculator
What you have to charge per hour to take home what you want, cover what the business costs, and keep something for the slow month. Change any number and the rate updates.
Overhead is $1,500 a month, $18,000 a year, spread over 1,200 billable hours.
| If you bill this many hours a week | 20 | 25 | 30 | 40 |
|---|---|---|---|---|
| You need to charge | $104 | $83 | $69 | $52 |
Most one-truck contractors bill 20 to 30 hours of a 45-hour week. Pricing on 40 is how a busy year ends with no money.
Your numbers stay in this browser so the next job starts from them. Nothing is sent anywhere.
How the number is built
Three things have to come out of every hour you bill: your pay, the business's overhead, and profit. Divide the first two by the hours you can actually bill in a year and add profit on top. That is the rate.
Worked example. You want to take home $72,000. Overhead is $1,500 a month, which is $18,000 a year. You bill 25 hours a week for 48 weeks, which is 1,200 hours. Your pay is $60 an hour. Overhead is $15 an hour. That is $75, and with 10 percent profit on top the rate is $83. Charge $85 and round up.
The mistake that empties the account
Pricing on 40 billable hours. Nobody bills 40. Every hour spent driving to a quote that did not close, standing in line at the supply house, or texting a customer who went quiet comes out of the same week. At 40 hours the example above says charge $52. At 25 real hours it says $83. The contractor who charges $52 is busy every day and broke in March.
What counts as overhead
- The truck: payment, fuel, insurance, tires, repairs.
- Liability insurance, license fees, bonding.
- Phone, internet, the website, software.
- Tools and equipment, including the ones that walk off.
- Advertising, the accountant, uniforms, the storage unit.
- Health insurance, if the business pays it.
If you are not sure, add up twelve months of bank statements and divide by twelve. It is almost always more than the number in your head.
Questions contractors ask
Why are billable hours so much lower than hours worked?
Because driving, looking at jobs, writing bids, buying material, and chasing money are not on anyone's invoice. A 45-hour week is usually 20 to 30 hours a customer pays for. Price on the hours you bill, not the hours you work.
Is profit on top of my pay?
Yes. Your pay is what you would earn working for someone else. Profit is what the business keeps for the slow month, the truck that dies, and growing. A business that only pays its owner a wage is a job with extra risk.
Should I charge the same rate for every job?
Most do, and it keeps bidding fast. Some charge more for small jobs, where the drive and setup are a bigger share of the time, and that is fine as long as the bid shows one price.
What about a helper?
Add their hours at a rate that covers their wage, their share of overhead, and profit. A helper at $25 an hour usually needs to be billed at $45 to $60.
Does the customer see this number?
No. The customer sees one price for the job. This is the number you use to build that price.
The other tools
- Markup vs margin calculator. Enter a cost and a markup, see the price and the real margin. Or go the other way.
- Job price calculator. Materials, labor, markup, and the deposit to ask for. The number that goes on the bid.
- Deposit calculator. Job price and the materials you buy first, out comes the deposit, the schedule, and the payment terms line for the bid.
- Invoice generator. Your business, the customer, the lines, tax, the deposit already paid. A clean PDF invoice, no account.
When the number is right, put it on an estimate the customer signs on their phone. Type the job and see it, no account needed. 30 days free, then $29 a month.