Contractor Hourly Rate Calculator

How the Calculator Works

This calculator reverses the typical approach. Instead of picking a number and hoping it works, it starts with what you need and works backward to the minimum hourly rate that keeps your business solvent.

Annual Expenses (Step 1)

• Desired salary: What you want to take home. Not revenue. Not gross. The actual dollars that land in your personal account. If you want to earn $75,000/year, that is your baseline.
• Annual overhead: Every cost that is not tied to a specific job. Insurance premiums, truck payments, fuel, tools, licenses, office rent, software subscriptions, marketing spend, phone bill. Most contractors undercount this by 20-40%.
• Profit target: The margin above salary and overhead that stays in the business. This funds growth, equipment replacement, and the bad months. Industry standard is 10-20%. Below 10% and you are one bad job away from trouble.

Billable Hours (Step 2)

• Working days: A standard 5-day work week gives you 250 days. Many contractors work 6-day weeks (300 days), but burnout is real. Be honest about what is sustainable.
• Non-billable days: This is where most rate calculations go wrong. Vacation, sick days, weather delays, estimate appointments, admin days, continuing education, slow periods. 55 days is a conservative starting point. Track yours for a month and multiply by 12.
• Billable hours per day: You might work 8-10 hours, but how many are spent on revenue-generating work? The rest goes to drive time, material runs, callbacks, phone calls, and cleanup. Six hours is the realistic average for most trades.

Average Contractor Hourly Rates by Trade (2026)

These ranges reflect national averages. Your local market, experience level, and specialization will shift these numbers. The “Billed to Customer” column is what the end client pays, which includes the contractor’s overhead and profit.

Click any trade to pre-fill the calculator below.

Common Hourly Rate Mistakes

1. Underestimating Non-Billable Time

The single biggest mistake. You work 50 hours a week but only 30 of those generate revenue. Estimates, drive time, material pickups, callbacks, invoicing, marketing, and admin all eat into your day. If you price based on 50 billable hours, you are subsidizing every non-billable hour from your profit.

2. Forgetting Overhead Costs

Many contractors calculate their rate as salary divided by hours and call it done. But overhead costs average 30-50% of revenue for most contracting businesses. That includes insurance ($3,000-15,000/year), vehicle costs ($8,000-15,000/year), tools and equipment ($2,000-10,000/year), licenses and permits, marketing, software, and office expenses. If your overhead is not in your rate, it is coming out of your profit.

3. Not Including a Profit Margin

Your salary is not profit. Salary is what you pay yourself to do the work. Profit is what the business earns above all costs, including your salary. Without a profit margin, you have no buffer for slow months, no money for growth, and no return on the risk you take as a business owner. Target 10-20% minimum.

4. Matching Competitor Rates Blindly

Your overhead structure is different from every other contractor. Your competitor might have a paid-off truck, a spouse who handles bookkeeping for free, or lower insurance costs. Matching their rate without knowing their cost structure is guessing. Calculate your own number and price from there.