FREE CONTRACTOR TOOL

Hourly Rate
Calculator

Stop guessing what to charge. Enter your salary goals, expenses, and billable hours to find your ideal hourly rate. Works for painters, fencers, and all trades.

Your Income Goals

$

What you want to take home each year

$

Insurance, tools, vehicle, marketing, etc.

Your Availability

hours

Hours you can actually bill clients (not admin/travel)

weeks

Account for vacation, sick days, holidays

15%
0%10%20%30%40%
Good

Your Recommended Hourly Rate

$74/hr

Minimum Rate (break-even)$63/hr
Annual Revenue Needed$105,882
Total Billable Hours/Year1,440 hrs

Annual Revenue Breakdown

Salary$75,000 (71%)
Business Expenses$15,000 (14%)
Profit$15,882 (15%)

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PRICING 101

Understanding Your Hourly Rate

Master these concepts to price your time confidently and profitably.

The Hidden Costs of Self-Employment

As an employee, your employer pays half your Social Security/Medicare taxes, provides insurance, and covers many expenses. As a contractor, you pay everything.

Self-employment tax alone is 15.3% of your income. Add insurance, tools, vehicle, and marketing — and you need to charge 30-50% more than an employee salary to net the same.

Billable vs. Total Hours

  • Client work (billable)60-75%
  • Quotes & estimates10-15%
  • Admin & bookkeeping5-10%
  • Marketing & sales5-10%

Only charge for billable hours — the rest is overhead.

Common Business Expenses

  • Vehicle costs ($5,000-15,000/year)
  • Tools and equipment ($2,000-10,000/year)
  • Insurance - liability & health ($3,000-12,000/year)
  • Licenses and certifications ($500-2,000/year)
  • Phone, software, marketing ($2,000-5,000/year)

Rate-Setting Tips

  • Research market rates in your area
  • Account for seasonal slow periods
  • Charge more for rush jobs or difficult clients
  • Raise rates annually (5-10% minimum)
  • Don't compete on price — compete on quality

Frequently Asked Questions

Start with what you want to earn annually (your salary), add all business expenses (insurance, tools, vehicle, marketing, etc.), then divide by your actual billable hours. Don't forget to add a profit margin on top — this covers unexpected costs and helps grow your business.

Not all hours you work are billable. You spend time on quotes, admin, travel, marketing, and unbilled client meetings. Most contractors can only bill 60-75% of their working hours. If you work 40 hours, you might only bill 25-30 of them.

Include everything it costs to run your business: vehicle expenses (gas, maintenance, insurance), tools and equipment, business insurance and licenses, marketing and advertising, phone and software subscriptions, office supplies, continuing education, and a portion of home office if applicable.

10-20% profit margin is typical for contractors. This covers unexpected costs, slow periods, equipment replacement, and business growth. Premium services or specialized trades can command higher margins. If you're not making at least 10% profit, you're essentially working for free when things go wrong.

Most self-employed contractors work 48-50 weeks per year, accounting for vacation, sick days, and holidays. Be realistic — if you take two weeks off for vacation, account for that. Some trades are seasonal and may only work 40-44 weeks.

Research rates in your area for similar trades. Skilled contractors typically charge $50-150/hour depending on the trade, location, and experience level. If you're significantly below market rate, you're leaving money on the table. If you're above, make sure you can justify the premium with quality or specialization.

Ready to calculate job profits?

Now that you know your hourly rate, use our profit calculator to price individual jobs with the right markup.