Contractor hourly rate calculator
Most contractors pick an hourly rate based on what competitors charge or what sounds reasonable. This calculator works backward from your income goal to find the rate you actually need.
Enter your numbers
What you want to take home per year
Hours you can actually bill for (not admin, drive time, estimates)
52 weeks minus vacation, holidays, sick days
Insurance, vehicle, tools, marketing, rent, phone, etc.
Percentage of revenue set aside as business profit (separate from your salary)
Your hourly rate breakdown
Minimum hourly rate
$0
Covers costs + salary (no profit buffer)
Recommended rate
$0
Includes your profit margin
Annual revenue needed
$0
Total billing to hit your goal
Here's how we calculated this
Why billable hours matter more than total hours
A 40-hour work week does not mean 40 billable hours. Most contractors spend 25% to 40% of their time on non-billable work: driving between jobs, writing estimates, ordering materials, answering calls, bookkeeping.
According to the Bureau of Labor Statistics, the average self-employed contractor in construction works about 43 hours per week. Of those, typically only 25 to 32 hours are directly billable. Using 30 billable hours in this calculator is realistic for most one-person operations.
If you bill hourly and your rate is based on a 40-hour week, you're undercharging by roughly 25% before you even account for overhead. See how flat rate pricing compares to hourly for a different approach.
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