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What Should You Charge Per Hour?

Why most trades undercharge: they price off "what the other guy charges" instead of their own numbers. Your rate has to cover your pay, your overhead, AND profit — spread across only the hours you can actually bill.

The annual pay YOU want to take home ($) Annual overhead (insurance, truck, tools, phone, software, admin) ($) Billable hours per week (after quoting, driving, admin — usually 25–32, not 40) Weeks you work per year (minus vacation/slow weeks) Target profit margin on top (%)

$—

the hourly rate you need to charge

Charge less than this and you're paying to work. This is your floor, not your ceiling — price jobs for margin on top.

How to read it

The math is simple and honest: (your pay + overhead) ÷ billable hours is your break-even rate — the point where you make exactly zero profit. Then divide by (1 − margin) to actually earn something. The number that surprises most contractors is billable hours: you clock 40 a week, but you can only bill ~28 after quoting, driving, and paperwork — so your rate has to carry all of it. More on the trap: how to price a job and the job pricing calculator.

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