100% FREE · NO SIGNUP · RUNS IN YOUR BROWSER

What Should You Actually Charge Per Hour?

Most contractors guess their rate off the competition — and quietly pay their own overhead out of their paycheck. Put in your real numbers and see the rate your business needs, line by line.

STEP 1

Your base rate

What one hour of your work has to earn so the business — not just you — comes out ahead.

What you want to pay yourself, before personal taxes
Truck, insurance, tools, software, phone, marketing
Hours a customer actually pays for — see note below
52 minus vacation, holidays, sick, slow weeks
Profit is not your salary — it’s what the business keeps
Why 25 hours and not 40? Because drive time, quotes, callbacks, supply runs, invoicing, and paperwork eat 10–20 hours of every week — and nobody pays you for those. Most solo trades honestly bill 20–30 hours a week. Price against 40 and every unbilled hour comes straight out of your pay.
$81.48
Required hourly rate
$73.33
Break-even rate (no profit)
1,200
Billable hours per year
The honest math, line by line
Salary you want to take home$70,000.00
Overhead: $1,500/mo × 12$18,000.00
Total the business must cover$88,000.00
Billable hours: 25/wk × 48 weeks1,200 hrs
Break-even rate (total ÷ hours)$73.33/hr
Add 10% profit margin (÷ 0.90)+$8.15/hr
Rate you need to charge$81.48/hr
You need $81.48 an hour — call it $82 — to pay yourself $70,000, cover $18,000 of overhead, and keep a 10% profit. Charge less and the difference comes out of your own paycheck.
STEP 2

Price a job

Materials plus markup, plus your hours at the rate from Step 1 (change it if you like).

What the materials cost you
10–30% is standard — sourcing and hauling aren’t free
Include setup and cleanup time
Auto-filled from Step 1 until you edit it
$1,448.88
Quote this job at
$208.89
Built-in profit
14%
Profit as % of job price
Where the price comes from
Materials at your cost$800.00
Materials markup (20%)+$160.00
Labor: 6 hrs × $81.48+$488.88
Job price$1,448.88
Of which: your pay & overhead share$439.99
Of which: profit (markup + margin)$208.89

Nothing you enter is saved or sent anywhere. The math runs entirely on your device. Estimates for planning, not tax advice.

What should you charge per hour? Take the salary you want plus a full year of overhead, divide by your real billable hours, then divide by one minus your profit margin — in one sentence: (salary + overhead) ÷ billable hours ÷ (1 − margin). For most skilled trades in 2026 that lands between $75 and $150 per hour, even when the owner only pays themselves $30–$40 of it.

Know your real numbers — the rest of the family

Employee Cost CalculatorHiring? A $25/hr employee costs a lot more than $25/hr. Lead Cost CalculatorWhat Thumbtack or Angi leads really cost per booked job.

How to use this calculator

  1. Set your salary. Enter the take-home pay you want for the year — what you’d earn working for someone else is a fair floor.
  2. Add up monthly overhead. Truck payment, fuel, insurance, tools, software, phone, licenses, marketing. Most solo trades find $1,000–$2,500/mo when they count honestly.
  3. Be honest about billable hours. Count only hours a customer pays for. Start at 25/week and adjust from your own calendar, not your hopes.
  4. Keep a profit margin. 10% is a floor, not greed. Profit is what survives a slow month, a blown transmission, or a bad job.
  5. Price jobs in Step 2. Materials plus markup, plus hours at your rate. Quote the total — not an hourly number customers can nickel-and-dime.

The overhead iceberg: why $75–$150/hr is normal

Customers see one person and one truck and think “$90 an hour?!” What they don’t see: the truck costs $800/mo, liability insurance $200/mo, tools and their replacement $150/mo, software and phone $150/mo, plus self-employment tax on everything. And the person they’re paying for 6 hours spent 2 more driving, quoting, and doing paperwork that nobody bills for.

That’s why a shop rate of $75–$150/hr is normal for skilled trades in 2026 even when “the guy only pays himself $30/hr.” Roughly speaking, a third of a healthy rate is wages, a third is overhead and unbillable time, and the rest is taxes and profit. A contractor charging $40/hr isn’t cheaper — they’re either skipping insurance or slowly going broke.

The same math is why underpricing is so hard to spot from the outside. Revenue looks fine, the schedule is full, and the bank account still shrinks — because every job quietly ships $20–$40 of unpaid overhead out the door with it.

Rate ranges are typical 2026 published figures for U.S. skilled trades; your market, license, and specialty will move them. Verify against local quotes.

Common questions

How do I calculate my hourly rate as a contractor?

Add the salary you want to a full year of business overhead, divide by your real billable hours for the year, then divide by one minus your profit margin. Example: ($70,000 + $18,000 overhead) ÷ 1,200 billable hours ÷ 0.90 = about $81 per hour.

Why should I only count 25 billable hours a week, not 40?

Because drive time, quotes, callbacks, supply runs, invoicing, and paperwork eat 10–20 hours of every week — and nobody pays you for those. Most solo trades honestly bill 20–30 hours a week. If you price against 40, every unbilled hour comes straight out of your pay.

What is a normal hourly rate for skilled trades?

Roughly $75–$150 per hour is normal for plumbers, electricians, HVAC techs, and similar skilled trades in 2026, with big metros and licensed specialty work higher. That is not what the tradesperson takes home — it also covers the truck, insurance, tools, taxes, and unbillable hours.

Why is my rate so much higher than my old paycheck?

An employer used to pay your overhead — vehicle, insurance, tools, software, payroll taxes, idle time. Now you do. A $30/hr paycheck becomes a $75–$100/hr rate once one person’s rate has to carry the whole business, and only 25-ish hours a week are billable.

Should I mark up materials, and by how much?

Yes. A 10–30% materials markup is standard, and 20% is a common default. The markup pays you for sourcing, picking up, hauling, warrantying, and fronting the money for materials. Selling materials at cost means doing that work for free.

Is this calculator really free?

Yes. No signup, no email, and nothing you type leaves your browser — the math runs entirely on your device.

More free tools: the full PHIT tools directory, the employee cost calculator for when you’re ready to hire, and the lead cost calculator to see what each booked job costs you in marketing.

Built by PHIT Web

A free tool from a company that builds websites service businesses own outright — no monthly ransom. You see your homepage free before paying a dollar.

See My Homepage Free →