Service Pricing Calculator
Figure out what to charge per hour based on your real costs, overhead, and income goals.
Insurance, truck, tools, software, marketing, rent, etc.
Employees (optional)
Enter your desired salary and costs to see what you need to charge.
Build estimates at these rates instantly with FieldLedgr
Start for FreeHow to Price Your Services as a Contractor
Pricing is one of the hardest decisions for any trades business owner. Charge too little and you work long hours for thin margins. Charge too much and you lose bids. The key is grounding your pricing in real numbers, not guesswork or what the competitor down the street charges.
Start with your true costs. Most contractors dramatically underestimate what it costs to run their business. Beyond materials and labor on the job, you pay for insurance, vehicles, fuel, tools, marketing, software, accounting, and dozens of other expenses. These overhead costs exist whether you are on a job or not, and every hour you bill must contribute its share toward covering them.
Understand markup vs. margin. These terms are often confused. Markup is the percentage you add on top of cost: a $100 item with 50% markup sells for $150. Margin is the percentage of the selling price that is profit: that same $150 sale has a 33% margin. When setting prices, think in terms of margin — it tells you what percentage of every dollar earned is actually profit.
Your hourly rate is not your take-home pay. If you charge $100/hour, you do not pocket $100/hour. That rate must cover your salary, overhead, taxes, and profit. A common rule of thumb: only about 30-40% of your billing rate becomes personal income. The rest goes to keeping the business running.
Billable hours matter more than total hours. You might work 50 hours a week, but only 25-35 of those are billable. The rest goes to estimates, driving, admin, callbacks, and marketing. Your billable rate must compensate for all those non-billable hours. This is why pricing based on what an employee earns per hour always leads to undercharging — employees do not carry overhead.
Use this calculator to set a baseline rate grounded in your actual numbers. Review it quarterly as costs change, and always know your minimum before you quote a job.
Frequently Asked Questions
- How much should I charge per hour as a contractor?
- Your hourly rate depends on your trade, location, overhead, and desired income. Most independent contractors need to charge 2-3x what they would earn as an employee to cover overhead, taxes, insurance, and profit. For example, if you would earn $30/hour as an employee, you likely need to charge $75-$100/hour as a contractor. Use this calculator with your real numbers to find your specific break-even and target rate.
- What overhead costs should I include?
- Include everything you pay to run the business beyond direct job materials and labor: vehicle payments, fuel, and maintenance; general liability and workers comp insurance; tools and equipment replacement; phone and internet; software and subscriptions; marketing and advertising; accounting and legal; office or shop rent; licenses and continuing education; and uniforms or safety gear. Most trades businesses have $20,000-$60,000 or more in annual overhead.
- How do I calculate my break-even rate?
- Your break-even rate is the minimum you must charge per hour to cover all costs with zero profit. Add up your desired salary, total overhead, and employee costs for the year. Divide that total by your annual billable hours (billable hours per week times weeks worked). That gives your break-even hourly rate. Then add your target profit margin on top — typically 15-25% — to get your actual billing rate.