Hourly Rate Calculator
Calculate the hourly rate you need to charge customers to cover your costs and hit your profit target.
How this works:Enter your business costs below (wages, expenses, etc.), and we'll calculate what hourly rate you need to charge customers to cover those costs 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.
Formula, examples, and pricing tipsOpen this if you want to understand or test the assumptions.
How the calculation works
Your hourly rate isn't just what you want to earn — it needs to cover all your costs and leave profit.
Calculate Your Time
Work out how many hours you can actually bill customers vs total hours worked (including admin, travel, quotes).
Add Up All Costs
Include your labour cost for ALL hours (billable + admin), plus fixed expenses like insurance, tools, and vehicle.
Add Profit Margin
Divide by billable hours and add your profit margin. This is what you need to charge customers per hour.
The hidden cost most people miss
If you work 40 hours but can only charge customers for 30, those 10 hours of admin, travel, and quoting still cost you money. Most tradespeople forget to factor this in and end up undercharging by 20-30%. This calculator accounts for all your working time.
Salary vs profit: what's the difference?
Your labour costis what you'd likely earn if you worked for someone else — your market-rate salary. This covers your time and skills.
Your take-home profit is the reward for taking the risk of running your own business. It compensates you for the uncertainty, the unpaid overtime, finding your own work, and building something of your own. Don't skip it — you've earned it.
Example scenarios
Click any example to load it into the calculator above and see how the numbers work for different business types.
Getting it right
Be honest about billable hours
Most people overestimate. Track your time for a week to get accurate numbers.
Include ALL fixed costs
Insurance, van, fuel, tools, software, phone, accountant, uniforms — it adds up.
Review quarterly
Costs change. Fuel goes up. Insurance renews. Recalculate every 3 months.
Common mistakes
Copying competitor prices
They might be losing money. Your costs are different. Calculate your own rate.
Forgetting non-billable time
Quoting, invoicing, travel between jobs, buying supplies — this is still work time.
Zero profit margin
"I'll just cover costs" means one bad month wipes you out. Always add margin.
Put your profitable rate to work
Build quotes, schedule jobs and track the actual time your team spends on each visit.