Free contractor tool
Contractor hourly rate calculator
Work out the hourly rate you actually need to charge. Enter the income you want to take home, your annual overhead, and the hours you can really bill, and see the rate that covers your costs and leaves a profit, not just your wage.
Priced the job? Now get paid for it.
Know your rate? Put it on a quote your customer can pay in a tap. Send your customer a card-payment quote with Redbud Way, collect a deposit up front, and get paid daily to your bank. Start free, and we never take a cut of your jobs. You pay Stripe card processing, with optional plans as you grow.
How to calculate your hourly rate
Your billable rate is not your wage. It has to cover your take-home pay, your overhead, and a profit, spread across only the hours you can actually bill. The formula is Hourly rate = (Income + Overhead) × (1 + Profit ÷ 100) ÷ Billable hours per year.
Example: you want $60,000 take-home, carry $20,000 of overhead, and add 10% profit. That is $80,000 × 1.10 = $88,000 of revenue needed. If you bill 30 hours a week for 48 weeks, that is 1,440 billable hours, so your rate is $88,000 ÷ 1,440 ≈ $61/hour — even though your take-home works out to far less per worked hour.
Why billable hours are the number that matters
You might work 40 hours a week, but estimating, driving, quoting, invoicing, and downtime eat into that. The share of hours you can bill is your biggest lever on the rate you need to charge.
| Billable share of a 40-hour week | Billable hours / week | Typical of |
|---|---|---|
| 50% | 20 hrs | Heavy admin / lots of driving |
| 60% | 24 hrs | Typical solo tradesperson |
| 70% | 28 hrs | Tight scheduling, some help |
| 80% | 32 hrs | Crew with a dispatcher |
The fewer hours you bill, the higher each one has to be priced to hit the same income — which is why raising your billable share (less admin, faster quoting) can matter more than raising your rate.
What should a contractor charge per hour?
As a rough 2024–2025 US guide, handymen commonly bill $50–$130/hour, plumbers and electricians $75–$250, and HVAC and landscaping crews $75–$150. These are billable rates that already include overhead and profit — not wages. Set yours from your own numbers above, then use it consistently.
Pricing per trade? See plumbing, HVAC, electrical, landscaping, and handyman billing on Redbud Way. Turning a rate into a fixed quote? Use the markup & margin calculator.
Frequently asked questions
- How do I calculate my hourly rate as a contractor?
- Add your target take-home income and your annual overhead, add a profit margin on top, then divide by the number of hours you can actually bill in a year. Formula: hourly rate = (income + overhead) × (1 + profit ÷ 100) ÷ billable hours per year. Billable hours are far fewer than the hours you work, because estimating, driving, admin, and downtime don’t get billed.
- What should a contractor charge per hour?
- It varies by trade and market, but common 2024–2025 US ranges are roughly $50–$130/hour for handymen, $75–$250 for plumbers and electricians, and $75–$150 for HVAC and landscaping crews. These are billable rates, not wages — they already include overhead and profit. Use your own numbers to find the rate that actually covers your business.
- Why is my billable rate higher than the wage I want to earn?
- Two reasons. First, overhead — insurance, vehicle, tools, software, licensing, and taxes — has to be covered before you earn a dollar. Second, not every working hour is billable: a solo tradesperson often bills only 55–65% of worked hours after estimating, driving, quoting, and admin. Both push your billable rate well above your target take-home wage.
- How many billable hours are in a year?
- A full-time schedule is about 2,080 hours (40 × 52), but after 2–4 weeks off you work roughly 1,900 hours, and only part of that is billable. If 60% of your hours are billable at ~48 weeks, that is around 1,150 billable hours a year — the number you should divide by, not 2,080.
- Should I include profit in my hourly rate?
- Yes. Covering your salary and overhead only breaks you even. Add a profit margin (commonly 10–20%) on top so the business itself earns a return you can reinvest or bank. This calculator lets you set that profit percentage separately from your take-home target.
- What about credit card fees?
- Tick “Customer pays by card” to see the standard Stripe processing fee (2.9% + $0.30) on one hour at your rate and what you keep after it. Redbud Way adds no platform markup on top of Stripe’s rate.