Hourly rate calculator for contractors
This calculator does the arithmetic most contractors skip. You enter what you pay a technician, what the burden on that wage costs you, roughly how many hours actually get billed, and what your overhead runs per year. It returns the rate you need to charge to cover all of it and still make the margin you set. The number is frequently uncomfortable, and that discomfort is the point — a rate that feels high but is calculated beats one that feels reasonable and quietly loses money on every job.
What you need before you start
The hourly wage you pay, your best estimate of payroll burden as a percentage, the number of hours a technician actually bills in a year, and your annual overhead. Rough numbers are fine; the structure matters more than the precision.
What the result tells you
The minimum rate to break even, and the rate that delivers the margin you entered. If your current rate sits below the first number, the business is subsidizing its customers.
Common questions
- Is this specific to a trade?
- No. The structure is the same for electrical, HVAC, plumbing or landscaping — only the inputs differ.
- Does it account for sales tax?
- No. Sales tax is collected on top and passed through; it is not part of your rate.