Hourly Rate Calculator — Fully-Loaded Labor Rate
Your hourly rate needs to cover more than your wage — it has to cover your overhead, your benefits, your truck, your insurance, and the hours you don't bill. Most tradespeople quote a rate that's 20–30% too low.
This calculator takes your target annual income, adds your annual overhead, and divides by your billable hours to give the rate that actually keeps you in business.
Hourly rate
$68/hr
Per 8-hr day
$543/day
Billable hrs/yr
1380
The classic mistake: quoting $50/hr but only billing 20 of 50 weekly hours — that's $1,000/wk gross, not $2,500. Only billable hours pay the bills.
The formula
Rate = (Target income + Annual overhead) ÷ Billable hours. If you want $90k and overhead is $40k, with 1,500 billable hours: $130k ÷ 1,500 = $86.67/hr.
Pro tips
- →Billable hours are NOT 2,080 — after drive time, estimates, and admin, 1,200–1,500 is realistic.
- →Round up: an $86/hr true cost quotes better at $95–$99.
- →Recheck this every year — overhead creeps and rates don't.
Frequently Asked Questions
What should a contractor charge per hour?+
Depends on fully-loaded cost: a target $90k income plus $40k overhead over 1,500 billable hours is $86/hr — most pros should be at $75–$125/hr before markup.
How many billable hours in a year?+
Realistically 1,200–1,500. The other hours go to estimates, drive time, materials runs, and admin.
Should I charge hourly or by the job?+
Price by the job using your hourly rate as the floor. Jobs hide inefficiency; hours don't.
Now imagine the quoting writing itself.
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