Free tool · Contractors & trades

What hourly rate should I charge?

Most new contractors charge what an employee earns per hour and wonder where the money went. This works backward from what you want to take home.

Take-home pay you want per year ($)

Yearly business costs ($): insurance, truck, tools, phone, licenses

Weeks you work per year

Hours you work per week

Share of hours that are billable (%)

Tax set-aside (%)

Profit on top (%)

Minimum hourly rate $0

How it's worked out

Billable hours = weeks × hours per week × billable share. Driving, quoting, buying parts and paperwork take a third of most contractors' time.
Money needed = take-home ÷ (1 − tax set-aside), plus business costs, plus your profit margin.
Rate = money needed ÷ billable hours.

The tax set-aside is a rough figure. Self-employed people in the US pay self-employment tax on top of income tax; your accountant can give you a better number.

Spreadsheet · $15

Job Estimate & Invoice Workbook

Price list, printable estimates with your business name, invoices with change orders and payments, and this rate calculator. Excel and Google Sheets.

See the workbook →

Also free: Job estimate calculator.