Hourly & Day Rate Calculator for Tradespeople & Contractors
What Hourly & Day Rate Should You Charge?
Calculate the hourly and day rate your trade or contracting business needs to charge to cover business costs, pay you properly and build in your chosen profit allowance.
Choose Your Currency
Choose your currency and enter all financial figures using the same currency.
Your Income Target
Start with how much you would like the business to generate for you over a full year.
Your Working Year
Tell us how much you realistically expect to work during the year.
Running a trade or contracting business normally involves unpaid time for travelling, preparing quotes, answering customers, buying materials, administration, bookkeeping and organising future jobs. Your chargeable hours therefore often need to earn enough to cover this non-billable time too.
Business Profit Allowance
Add an optional percentage above your required income and operating costs to give the business additional profit, contingency and room for growth.
Your Recommended Hourly & Day Rate
Based on your income target, business expenses, available working time and chosen profit / contingency allowance.
A very high billable percentage may underestimate the rate you need to charge because travelling, quoting, buying materials, administration and customer communication may not all be directly billable.
Minimum Rate vs Recommended Rate
Your minimum figure covers the income target and expenses entered above. Your recommended figure also includes your selected profit / contingency allowance.
Approximate rate required to cover your desired income and business operating expenses.
Includes your additional business profit / contingency allowance.
Your Annual Revenue Target
Here's how your annual business revenue requirement has been calculated.
Your Working Time Breakdown
Your rate is based on the hours that can realistically be charged to customers rather than every hour spent running your business.
Think of the recommended hourly figure as the average amount each billable hour needs to generate. You can still charge different rates for specialist work, emergency jobs, evenings, weekends, difficult access, travel or higher-risk work.
This calculator is intended as a business planning guide. Actual prices should also take account of your local market, competition, taxes, insurance, job complexity and other business-specific costs.
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Quote & Invoice Generator
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Get the Quote & Invoice Generator →How Much Should You Charge Per Hour or Per Day?
One of the most important decisions for any self-employed tradesperson, contractor or service business is deciding what to charge for your time. Charge too little and you may stay busy while making very little real profit. Charge too much without understanding your market and you may struggle to win enough work.
The purpose of this free hourly rate calculator is to help you work backwards from the income you want, the expenses your business has and the number of hours you can realistically charge to customers.
It can be used by handymen, builders, painters and decorators, joiners, carpenters, plumbers, electricians, tilers, landscapers, flooring contractors, maintenance businesses and many other self-employed trades and service professionals.
Why Your Hourly Rate Matters
Your hourly rate should do more than simply pay you for the hours spent physically working on a customer's property. It also needs to help cover the cost of running the business.
Direct Working Time
This is the time spent carrying out work that can normally be charged directly to a customer, such as installing, repairing, decorating, building or maintaining something.
Non-Billable Business Time
Quoting, travelling, buying materials, answering calls, invoicing, bookkeeping, scheduling jobs and marketing may all be necessary business activities even though customers do not directly pay for every hour spent doing them.
A common pricing mistake: dividing your desired annual income by every hour you expect to work. In reality, only part of your working week may be directly billable.
How to Calculate Your Hourly Rate
A useful starting point is to calculate how much annual revenue your business needs, then divide that figure by the number of hours you realistically expect to bill to customers.
- Decide how much annual income you want the business to provide for you.
- Estimate your annual business expenses.
- Add those figures together to calculate your minimum annual revenue.
- Estimate how many weeks and days you will actually work during the year.
- Estimate what percentage of those working hours can realistically be charged to customers.
- Divide the required annual revenue by your estimated billable hours.
- Add an additional profit or contingency allowance if required.
Basic formula:
Required Annual Revenue ÷ Annual Billable Hours =
Minimum Hourly Charge-Out Rate
What Business Expenses Should You Include?
The exact costs will depend on your trade and how your business operates, but common expenses can include:
- Vehicle payments or depreciation
- Fuel and vehicle maintenance
- Business insurance
- Public liability insurance
- Tools and equipment
- Tool repairs and replacement
- Workwear and protective equipment
- Telephone and internet
- Advertising and marketing
- Website costs
- Accounting or bookkeeping
- Software subscriptions
- Storage or workshop costs
- Licences, training and professional fees
Missing business expenses from your calculation can make an hourly rate appear profitable when it is actually too low.
What Percentage of Your Working Day Is Actually Billable?
This is one of the most important parts of calculating a realistic contractor or tradesperson hourly rate.
For example, someone may work an eight-hour day but only spend five or six of those hours carrying out work that can be directly charged to a customer. The remaining time might be spent travelling between jobs, collecting supplies, answering customers, preparing estimates or dealing with administration.
If you assume every working hour is billable, your calculated hourly rate may be too low.
| Working Day | Billable % | Billable Hours |
|---|---|---|
| 8 hours | 50% | 4.0 hours |
| 8 hours | 60% | 4.8 hours |
| 8 hours | 70% | 5.6 hours |
| 8 hours | 80% | 6.4 hours |
| 8 hours | 90% | 7.2 hours |
Should You Charge an Hourly Rate or a Day Rate?
There is no single pricing method that suits every trade or every job. Many contractors use a combination of hourly rates, day rates and fixed job prices.
Hourly Rate
Hourly pricing can work well for smaller jobs, fault finding, maintenance work, unpredictable repairs or jobs where the final amount of labour is difficult to know in advance.
Day Rate
A day rate can be easier for larger projects where a contractor is likely to spend most or all of the working day on the same job.
Fixed-price work can often be more attractive to customers because they know the total cost before work begins. Your hourly or day rate can still be used internally to calculate the labour portion of that fixed price.
Should You Add Profit on Top of Your Hourly Rate?
Paying yourself for your labour and earning a business profit are not necessarily the same thing.
A healthy business may need additional margin to cover unexpected costs, replacement equipment, quiet periods, business growth and future investment.
That is why this calculator lets you add an optional profit or contingency percentage above your desired income and estimated annual business costs.
Your Calculated Rate Is a Starting Point, Not a Price Rule
A mathematical hourly rate tells you what your business may need to generate, but it does not automatically tell you what customers in your area are willing to pay.
Your final pricing may also depend on:
- Your trade and level of specialist skill
- Your experience and reputation
- Local demand
- Competition in your area
- The difficulty of the work
- Emergency or out-of-hours work
- Travel distance
- Risk and potential liability
- Whether specialist tools or equipment are required
- Whether the job prevents you from booking other work
A specialist contractor may reasonably charge far more per hour than someone carrying out simple general maintenance, even if both have similar business expenses.
Hourly & Day Rate Calculator FAQs
Common questions from tradespeople, contractors and self-employed service businesses when deciding what to charge.
What hourly rate should I charge as a self-employed tradesperson?
There is no single correct hourly rate. Your rate should take into account your desired income, annual business expenses, available billable hours, local market conditions, experience and the type of work you provide. The calculator above helps estimate a minimum and recommended rate using your own business figures.
How do I calculate my contractor hourly rate?
Start by adding your desired annual income to your estimated annual business costs. Then divide that amount by the number of hours you realistically expect to bill customers during the year. You can then add a profit or contingency allowance if required.
What is a billable hour?
A billable hour is an hour of work that can be charged directly to a customer. Time spent travelling, buying materials, preparing quotes, dealing with enquiries or carrying out administration may be necessary business time without always being directly billable.
Should travel time be included in my hourly rate?
It depends on how your business charges. Some contractors include normal travel within their overall pricing, while others charge travel time, mileage or a call-out fee separately. Either way, travel should be considered when deciding whether your overall pricing is profitable.
Is a day rate simply my hourly rate multiplied by eight?
Not necessarily. If your hourly rate has been calculated using only your realistic billable hours, multiplying it by every hour in the working day could double-count non-billable time. This calculator bases the recommended day rate on the revenue an average working day needs to generate.
Should I charge more for emergency or weekend work?
Many businesses charge a premium for urgent, evening, weekend or out-of-hours work because those jobs can disrupt schedules and reduce personal time. Your normal calculated rate can therefore be used as a starting point rather than a fixed rate for every job.
Should materials be included in my hourly rate?
Normally, job-specific materials are priced separately from labour. However, general consumables, tools and other ongoing operating costs can be included within your annual business expenses when calculating the rate your business needs.
Should I add markup to materials?
Many contractors add a markup to materials to cover the time and responsibility involved in sourcing, ordering, collecting, transporting and managing them. The appropriate markup depends on your business and the type of project.
Does this calculator include income tax or VAT?
No. The calculator is intended as a general business pricing tool. Personal income tax, corporation tax, VAT, sales tax and other taxes vary by location and business structure and should be considered separately where applicable.
Can I use this calculator outside the UK?
Yes. The calculation method is not specific to the UK. Select your preferred currency and enter your own income, costs and working figures. Tax rules and typical market rates will still vary between countries and regions.
Should I charge the same hourly rate for every type of work?
Not necessarily. Specialist, difficult, urgent or higher-risk work may justify a higher rate than routine work. Many successful trade businesses use their normal hourly rate as a baseline and adjust pricing depending on the job.
Is fixed-price work better than charging by the hour?
Fixed pricing can be attractive because customers know the total cost in advance. However, an internal hourly or day rate is still useful when calculating how much labour should be included in a fixed-price quote.
More Free Pricing Tools
Once you know the rate your business needs, use our other free tools to turn that rate into real job prices.