Hourly Rate Calculator
Calculate what you need to charge per hour as a contractor to hit your income goal after taxes, overhead, and non-billable time. Stop undercharging for your work.
Monthly Overhead
SE tax + income tax (25-35% typical)
Sanity Check (Optional)
Enter your average job to see how many jobs per month you need and whether your current pricing actually delivers your target rate.
Your Rate
Charge Per Hour
$140
minimum rate
Daily Rate (8 hrs)
$1123
full day
Weekly Revenue
$3,650
target
Monthly Revenue
$14,905
gross needed
Where Each Billable Hour Goes
Out of every $140 you charge, this is who gets it.
$20/hr
$42/hr
$78/hr
Billable Hours/Year
1,274
of 1,960 total
Annual Overhead
$25,200
$2,100/mo
Gross Revenue Needed
$178,857
before taxes
Reality Check: Your Average Job
At $2,500 per job and 12 labor hours each:
Jobs Needed Per Month
6.0
72/year
Effective Rate Per Job
$208/hr
job price ÷ hours
Pricing Gap
+$68/hr
above target
What If You Could Boost Billable Time to 75%?
If you cut admin time and pushed billable utilization from 65% to 75%, you could charge $122/hr instead — that's $19/hr cheaper and still hit the same take-home. The fastest path to a lower rate isn't cheaper labor — it's less paperwork.
How to Use This Calculator
Enter your desired annual take-home, then dial in time off, billable percentage (60-70% is typical because the rest goes to estimates, travel, and admin), monthly overhead, and tax rate. Add an average job size and labor hours to see how many jobs per month you need and whether your current pricing actually covers the rate.
Formula Used
Gross Needed = (Target Income + Annual Overhead) / (1 - Tax Rate). Hourly Rate = Gross Needed / Billable Hours. Each billable hour pays for: Overhead/hr + Taxes/hr + Take-home/hr.
Related Business Calculators
Want software that handles estimates, invoicing, and scheduling so you can focus on growing your business? Find the right tool for your trade and team size.
Need to figure out what to charge?
All 10 pricing formulas + 18-trade margin benchmarks.
Contractor Pricing Formulas Cheatsheet→Starting or growing your contracting business?
Our free startup guide covers licensing, LLC formation, insurance, pricing, and getting your first customers.
How to Start a Contracting Business→Free Software Guide for Business Professionals
Get our free guide comparing the best software tools for business businesses — with real pricing and honest recommendations.
No spam. Unsubscribe anytime.
Disclaimer
This calculator is for estimation purposes only. Results may vary based on local conditions, materials, and building codes. Always consult a licensed professional before making decisions based on these calculations. MyContractorTools is not responsible for any errors or omissions.