Hourly rate calculator
Calculate the hourly rate you need to charge customers to cover your costs and hit your profit target.
Enter what the business costs you, and the calculator works out the hourly rate to charge customers to cover it and make a profit.
Your costs
What it costs you internally (wages, expenses, etc.)
Labour cost per hour (not what you charge). E.g., minimum wage, market rate salary for an employee
Insurance, tools, vehicle, software, etc.
The profit you want to make on top of costs
Your time
How much time can you actually charge customers for?
Hours you can charge customers for on average per week
Including admin, travel, quotes, driving, texting customers, buying supplies etc.
Weeks physically worked per year excluding holidays and time off
Your hourly rate
What you need to charge customers per hour
To achieve 20% profit margin
This is your labour rate to charge customers. Add materials, supplies, and job-specific costs on top when quoting.
Calculation breakdownAnnual hours, costs, revenue, and profit behind this rate.
Time
Costs
Revenue
Formula, examples, and pricing tipsOpen this if you want to understand or test the assumptions.
How the calculation works
- Billable hours. Hours you can charge a customer for each week, times the weeks you work.
- All your costs. Your labour cost for every hour you work, billable or not, plus fixed costs such as insurance, the van, fuel and tools.
- Profit. Add your margin or income goal, then divide by the billable hours. That is the rate to charge.
The hours you cannot charge for
If you work 40 hours and can charge for 30, the other 10 hours of quoting, travel and admin still cost you. The calculator counts them.
Wage and profit are different
Your labour cost is what you would earn working for someone else. Profit is on top: it pays for the risk, the unpaid evenings and the quiet months.
Worked examples
Load one into the calculator to see how the numbers move.
Getting it right
- Be honest about billable hours. Track a normal week before you trust the number.
- Include every fixed cost. Insurance, van, fuel, tools, software, phone, accountant and workwear.
- Recalculate every quarter. Fuel goes up and insurance renews.
Common mistakes
- Copying a competitor. Their costs are not yours, and they may be losing money.
- Forgetting unpaid time. Quoting, invoicing, travel and buying supplies are still work.
- No margin. Just covering costs means one bad month wipes you out.
Put your profitable rate to work
Build quotes, schedule jobs and track the actual time your team spends on each visit.