Find the minimum rate you need to charge to hit your income goal, cover your overhead, and make an actual profit — not just break even.
What you want to pay yourself after tax-deductible expenses
Vehicle, insurance, tools, phone, software, marketing — not job-specific costs
Hours actually billed to clients — not total hours worked (exclude admin, quoting, driving)
Most contractors work 46–50 weeks after vacation and public holidays
Profit on top of all costs — 15–25% is typical for most trades
Enter your numbers and click Calculate to see your recommended hourly rate.
Most contractors work 40–50 hours a week but only bill 25–35 of them. Admin, quoting, driving, and purchasing eat the rest. Using your actual billable hours — not total hours — gives you an honest rate.
Vehicle costs, insurance, tools, phone, software, and marketing are real business costs. Contractors who don't factor these into their rate are effectively subsidizing their clients — working for less than they think.
Profit margin is separate from your income. It's the buffer that funds slow periods, equipment replacement, and business growth. Most trades need 15–25% net margin to be sustainably profitable.
Add your desired annual income to your annual overhead costs. Divide that total by your annual billable hours to get your break-even rate. Then divide by (1 minus your target profit margin) to get your final rate. Example: ($80,000 + $24,000) ÷ 1,440 hrs = $72/hr break-even. At 20% margin: $72 ÷ 0.8 = $90/hr.
Vehicle payments and fuel, liability insurance, tools and equipment maintenance, phone, software subscriptions, advertising, accounting fees, and any other fixed monthly business cost. Do not include job-specific material costs — those get added separately to each quote.
Most independent contractors bill 25–35 hours per week even if they work 40–50. Admin, quoting, material runs, driving, and slow periods account for the rest. A realistic billable efficiency for most trades is 60–70% of working hours.
A healthy net profit margin for most trades is 15–25%. High-demand or specialized work can support 25–35%. This is profit on top of all costs including your own income — it's the business buffer for slow periods, equipment replacement, and growth.