Contractor hourly rate & overhead calculator
Most contractors set their rate by asking around, then never revisit it as overhead creeps up. Enter your numbers below and see your break-even rate — the floor — and your recommended billable rate, which actually funds a profit. Free, no signup required, nothing is stored.
You need $111,111.11 in annual revenue from 1,500 total billable hours/year (1 worker × 30 hr/wk × 50 wk).
The gap between the two rates is $7.41/hr (11.1% above break-even) — that gap is your actual profit margin. Quote below break-even and every billable hour loses money before overhead is even paid back; quote at break-even and you're working for free.
Setting your rate once isn't the hard part — holding it on every quote is. Automic Trades' Bid-Support specialist prices every job to your real margin automatically.
Get started →How to use this calculator
Start with the salary you actually want to take home this year, then add every real annual overhead cost your business carries — rent, insurance, software, vehicle, tools, marketing. Set how many people actually bill hours to customers (including you, if you're still in the field), how many hours a week each of them is realistically billable, and how many weeks you work in a year after holidays and slow stretches. The calculator does the rest instantly — no submit button, no signup.
Why 30 billable hours, not 40
A 40-hour paid week is not a 40-hour billable week. Drive time, estimates, material runs, callbacks, and paperwork all cost real hours that never appear on an invoice. Pricing your rate off 40 billable hours when the real number is closer to 30 means every job is quietly underpriced — the math looks fine on paper and comes up short every single week. The default here is 30; raise it if your crew's billable hours genuinely run higher.
What to count as overhead
Overhead is everything the business pays whether or not a job happens that month: rent or a storage unit, general liability and vehicle insurance, software and subscriptions, vehicle payments and fuel, phone, marketing, and any office or admin staff who don't bill hours directly. If it shows up on your books every month regardless of how much work came in, it belongs in this number.
Frequently asked
- Why does the calculator default to 30 billable hours a week instead of 40?
- Most trades workers are paid for 40 hours but rarely bill 40 to a customer. Drive time between jobs, estimates, callbacks, material runs, and admin all eat into the week without ever showing up on an invoice. Defaulting to 30 billable hours (not 40 paid hours) is what keeps the rate honest — you can always raise it if your crew genuinely bills closer to 40.
- What's the difference between the break-even rate and the recommended rate?
- The break-even rate is what you need to charge just to cover your salary and overhead — at that rate you make $0 profit. The recommended rate builds your target profit margin on top of that, so it's the rate that actually grows the business rather than just keeping it alive.
- What should I count as overhead?
- Anything the business pays whether or not a job happens that month: rent or a storage unit, insurance, software and subscriptions, vehicle payments and fuel, phone, marketing, and any office or admin staff who don’t bill hours directly. Leaving overhead out of your rate is the single most common way contractors underprice their own labor.
- Should my target profit margin be applied to cost or to revenue?
- This calculator applies margin to revenue — a 10% margin means 10% of every dollar you charge is profit, not 10% added on top of cost. That's a meaningfully higher number than a cost-plus markup of the same percentage, and it's the version that matches how profit margin is normally reported.
Also on this site
Once you know your rate, use the job price & markup calculator to price an individual job from labor and materials. For the reasoning behind the 30-vs-40 default and the rest of the pricing math, see the pricing & profitability guide.