Enter your income goal, trade, and real costs. Get the minimum hourly rate you need to charge to hit your number.
Most contractors only bill 25–30 hours per week, even when working 40+. Estimating, travel, and admin eat the rest.
Selecting a trade pre-fills realistic overhead estimates below. Adjust any value to match your situation.
Payment + fuel + maintenance + insurance
Default 15.3% (SS + Medicare). Lower if filing as S-Corp.
Annual premium total
Annual contribution goal
| Component | Annual | Per Hour | % |
|---|---|---|---|
| Fill in your numbers to see the breakdown. | |||
We'll email the full breakdown to you so you have it for reference.
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How It Works
The most common pricing mistake in the trades isn't bad math — it's missing variables. Most contractors start with a gut-feel number, ask around what others nearby are charging, and land somewhere that feels competitive. The problem: that number rarely accounts for what it actually costs to run the business.
If you've never added up your insurance premium, truck payment, fuel, tool replacement, software, phone, marketing, and accountant as a single annual figure — and then divided it by your actual billable hours — you're likely undercharging. This calculator does that math for you and works backward from your income goal to the rate you need.
If you work 40 hours a week, you do not bill 40 hours a week. Estimating jobs takes time. Driving between sites takes time. Admin, invoicing, supplier calls, and warranty callbacks take time. Studies of trade businesses consistently show that busy, fully booked contractors bill 25–30 hours per week when all non-billable time is counted.
That gap matters enormously. A contractor who expects to bill 35 hours at $75/hr looks like they're earning $136,000 per year. But at 27 actual billable hours, that's $105,000 — before taxes, overhead, or benefits. This calculator defaults to 30 billable hours per week. Be honest with yourself here; this single number changes your required rate more than anything else.
Overhead isn't just your monthly bills — it's every dollar your business spends that isn't direct labor on a job. General liability insurance, your truck payment, fuel, maintenance, tool replacement, phone, software, marketing, and the accountant who handles your taxes: all of it has to be covered before you take home a dollar.
Many contractors forget "soft overhead" — tools that needed replacing mid-season, a job that required a redo at their cost, or a slow stretch where insurance and truck payments still came due. This calculator spreads annual costs evenly across your working year, which is the correct framing: your rate has to average out over the whole year, not just the busy months.
If your overhead costs $20,000 per year and you want to "add 20% to cover it," that's a markup — not a margin. A 20% markup on $100 gives you $120, but overhead is 16.7% of that $120 in revenue, not 20%. A true 20% margin means overhead equals $20 out of every $100 billed — to achieve that, you'd charge $125 on a $100 base cost.
Most contractors applying markups are leaving money behind because they're conflating the two. This calculator avoids the confusion entirely by working top-down: it starts from your income goal and computes the rate you need, rather than starting from costs and applying a multiplier.
When you worked as an employee, you paid half of Social Security and Medicare — your employer paid the other half. As a self-employed contractor, you pay both halves: 15.3% of your net self-employment income (technically applied to 92.35% of net income, due to a deductible portion). For someone netting $90,000, that's roughly $12,700 in SE tax alone — before federal or state income tax.
Most informal rate calculators ignore this entirely. This one includes it at 15.3% by default. If you're organized as an S-Corp and paying yourself a reasonable salary, your effective SE tax exposure is lower — adjust the percentage down accordingly.
Generic hourly rate calculators let you enter a cost and apply a markup percentage. This one is built specifically for self-employed contractors and small trade businesses. It accounts for self-employment tax, the realistic number of billable hours in a contractor's week, and trade-specific overhead estimates grounded in real insurance and equipment costs for each trade.
The result is your minimum required rate — the floor below which you cannot hit your income goal. Whether you charge more (you should, if the market supports it) is a separate and worthwhile question. But you can't answer that question until you know where your floor is.
GCUSuite helps you manage customers, track jobs, and send invoices — all in one simple dashboard.
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