Contractor Hourly Rate Calculator

The formula has three steps. First, calculate your annual billable hours: (workdays − days off) × (hours per day − non-billable hours). A typical solo contractor has about 1,200–1,380 billable hours per year. Second, divide your total annual costs (desired income + overhead) by billable hours to get your break-even rate. Third, divide by (1 − desired margin) to add profit. For example: $80,000 income + $28,000 overhead = $108,000 ÷ 1,300 hours = $83.08/hr break-even. Add 15% profit margin: $83.08 ÷ 0.85 = $97.74/hr target rate.

Industry-standard estimates put this at 1,100–1,400 hours per year for a solo contractor. Start with 260 workdays, subtract ~30 days (federal holidays, vacation, sick time), leaving ~230 productive days. Then subtract non-billable time (drive time, quoting, admin, supply runs) — typically 1.5–3 hours per day. At 6 billable hours per day × 230 days = 1,380 hours. Service-heavy trades (HVAC, plumbing) often have more non-billable time due to dispatch and driving, bringing the realistic number to 1,000–1,200 hours.

When you are self-employed, every dollar of overhead — your truck payment, insurance, tools, marketing, software — comes out of your revenue before you pay yourself. An employee earning $30/hr has their truck, insurance, and tools provided. A self-employed contractor charging $30/hr bears all those costs out of that $30. A solo contractor with $25,000 in overhead billing 1,300 hours needs to charge $19.23/hr just to cover overhead — before paying themselves a single dollar.

According to data from Insureon, Joist, and Build-Folio, a lean solo contractor typically carries $12,000–$30,000 in annual overhead. The main categories: vehicle ($10k–$15k), insurance ($1k–$2.5k), tools ($3k–$5k), marketing ($2.5k–$5k), and software ($1.5k–$3k). A two-person crew with employees adds workers comp and payroll costs, typically pushing overhead to $40,000–$80,000. Overhead as a percentage of revenue typically runs 25–40% for small contractors.

The break-even rate is what you must charge just to cover income + overhead — you don't lose money, but you also have no cushion for unexpected expenses, slow weeks, or growth investment. The target rate adds a profit margin (typically 10–25%) on top of break-even. This profit covers: slow seasons, equipment replacements, business growth, and a real return on the risk of being self-employed. Most pricing guides recommend at least 15% above break-even for a sustainable small trade business.

According to HomeGuide 2026 national data: plumbers charge $45–$200/hr (avg $75–$100); electricians $50–$130/hr (avg $85–$100); HVAC technicians $75–$150/hr (avg $100–$125); roofers $30–$100/hr (avg $45–$65); painters $25–$75/hr (avg $45–$55); carpenters $35–$100/hr (avg $60–$75); general contractors $50–$150/hr (avg $85–$105). Emergency or after-hours rates typically add 50–100% to these figures.

BLS wages are for employees — they include no overhead recovery and no business profit. A plumber employee earns a BLS median of $62,970/year. A self-employed plumber charging the same effective hourly rate would actually take home far less after overhead, because their rate must cover the employer's side of payroll taxes, tools, vehicle, insurance, and other costs. Owner-operators typically need to earn 1.5–2.5x the employee median just to take home the same amount. Our calculator builds all of this in automatically.

For a small solo trade business, 10–20% above break-even is a realistic starting target. This leaves room for: slow weeks (most contractors have 4–8 weeks of below-capacity time per year), unexpected repairs or replacements, business savings and growth. The NAHB 2024 Cost of Doing Business Study found the top 25% of remodelers earned 17.7% net profit margin — this is gross profit after overhead, which corresponds to a 20–30% above-break-even rate on the job cost side.