How do I work out what to charge per hour?

Start at the end of the year, not the start of the day. Add what you want to take home, the tax on it, and everything the business costs to run. Divide that by the hours that actually reach an invoice, which is not the same as the hours you work.

Why is my hourly rate not what I take home?

Because you do not invoice every hour you work. Quoting, chasing money, driving, sourcing and site visits that never become jobs are all worked and none of them are billed. At 60% utilisation every hour you invoice is carrying forty minutes you cannot.

What billable percentage should I use?

Count it rather than guess it. A solo contractor running their own quoting and admin usually lands between 50% and 70%. Use the table on this page to see what each level does to the rate before you pick one.

Should the rate include profit as well as my wages?

They are different things. Your wages are what the business pays you for working. Profit is what the business keeps for carrying the risk, and it is what buys the second truck or covers the job that goes wrong. Set it as a share of price, not as a markup on cost.

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What do you have to charge an hour?

Not what the next guy charges. Your year, your overhead, and the hours that actually reach an invoice, divided into the number you have to quote to end up where you said you wanted to be.

Currency

CADGBPUSD

What you want to earn this year

Before personal income tax. What you want to pay yourself for doing the work.

Annual overhead

Everything no single job carries: truck, fuel, insurance, phone, tools, software, accountant, licences.

Hours a week

Weeks a year

Share of those hours you invoice

Quoting, chasing payment, driving, sourcing and dead site visits are worked and not billed. Most solo contractors land between 50 and 70.

Tax you set aside

Income tax plus CPP, national insurance or self-employment tax, as a share of your pay. Leave blank to leave it out.

Profit the business keeps

On top of paying you. Taken as a share of price. Leave blank if the business is just you and your wage.

What you charge today

Optional. Enter it and the page prices the gap.

Filled in with an example so the page answers before you type anything. Change any field and the answer, and the link to it, become yours.

Your hourly rate

$73.30

Quote it as $75 an hour. That is $95,000 of revenue spread over 1,296 billable hours.

Hours you never invoice

864 h

Every hour you do bill is carrying 40 minutes of work you cannot charge for.

Overhead alone, per billable hour

$11.57

What the first part of every hour pays for before you earn anything.

Enter what you charge today

The last field turns this from a rate into a diagnosis: what your current number actually leaves you at the end of the year, and the raise that closes the gap.

How that was worked out

What you want to take home
the figure you entered, before personal income tax
$80,000
Plus the overhead the business carries
truck, insurance, phone, tools, software, accountant
$15,000
Revenue the year has to produce
everything above, added up
$95,000
Hours you work
45 hours a week over 48 weeks
2,160 h
Hours that reach an invoice
2,160 worked at 60% billable, so 864 hours are never invoiced
1,296 h
Your rate
$95,000 divided by 1,296 billable hours
$73.30

What a slow month does to the number

Hours you invoice	Billable hours a year	Rate needed
40%	864 h	$109.95
50%	1,080 h	$87.96
60%	1,296 h	$73.30
70%	1,512 h	$62.83
80%	1,728 h	$54.98
90%	1,944 h	$48.87

The same year needs a different rate depending on how much of your week reaches an invoice. Ten points of utilisation is worth more to you than most price rises.

This is a labour rate

It covers your hours and the business behind them. Materials, plant hire and subs are priced on top with their own markup, and the profit on those is a separate decision from the profit on your time.

Then stop selling hours

Knowing the rate is what lets you quote a fixed price safely. You price the job at what it is worth to the client, and the rate is how you check the job is worth doing before you sign it.

Questions this page answers

How do I work out what to charge per hour?: Start at the end of the year, not the start of the day. Add what you want to take home, the tax on it, and everything the business costs to run. Divide that by the hours that actually reach an invoice, which is not the same as the hours you work.
Why is my hourly rate not what I take home?: Because you do not invoice every hour you work. Quoting, chasing money, driving, sourcing and site visits that never become jobs are all worked and none of them are billed. At 60% utilisation every hour you invoice is carrying forty minutes you cannot.
What billable percentage should I use?: Count it rather than guess it. A solo contractor running their own quoting and admin usually lands between 50% and 70%. Use the table on this page to see what each level does to the rate before you pick one.
Should the rate include profit as well as my wages?: They are different things. Your wages are what the business pays you for working. Profit is what the business keeps for carrying the risk, and it is what buys the second truck or covers the job that goes wrong. Set it as a share of price, not as a markup on cost.

Or find out what your rate actually is, from the jobs you already did

Track the time against the job and the platform does this sum with your real hours instead of the ones you estimated on a Sunday night. Quoted against actual, job by job, so the rate that looked fine on paper gets checked by the work.

Then the quote becomes the invoice, the invoice chases itself, and your win rate against price tells you whether the number you just worked out is one the market will pay.

Open the demo business Read the guide on setting your rate

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