FOR TRADE CONTRACTORS AND SHOP OWNERS

You do not charge what you think you charge.

A $28 wage is not a $28 hour. By the time payroll taxes, workers’ comp, the truck, the phone, the paid holidays and every hour spent driving, estimating and fixing callbacks are in it, the hour you sell costs far more — and the overhead behind it still has to come out of somewhere. Put your own year in below and see the burden rate, the overhead rate, and the number a crew hour has to be sold at.

What should I charge per hour as a contractor?

This calculator vs. ServiceTitan — what a pricebook holds, and what has to decide the number first.

This calculator vs. Housecall Pro — what a Price Book holds, and what has to decide the number first.

This calculator vs. guessing your burden and overhead — the 20%/10% rule of thumb, and what it actually costs.

The crew and the hours

The hours are the part most shops get wrong. You pay for 2,080 hours a year and you sell far fewer, and the gap has to be recovered inside the ones you do sell.

Paid days off means holidays, vacation and sick days — paid, and on nobody’s invoice. The non-billable share is everything else that is worked but not sold: drive time between jobs, loading, estimating, shop and yard time, warranty callbacks and rework. Twenty per cent is a common figure for a small crew; measure yours if you can.

What a person costs on top of the wage

Per field employee, per year. These are the costs of employing somebody rather than the costs of a job.

Workers’ comp varies more than any other figure here — a low-risk trade may be under 4% of payroll and a roofing classification many times that. Use your own declarations page, not a rule of thumb.

Overhead: the business, not the job

Annual, whole business. Anything you would still be paying in a month with no work booked.

Owner pay belongs here for the hours you spend estimating, quoting and running the shop. If you also work on the tools, count those hours in the crew above instead — splitting your own pay between the two is the most common thing to get wrong on this page. Materials and subs is your annual spend on both; it is the rest of the direct cost the overhead rate is measured against.

What you want to make

Net margin is a share of the price, not a mark-up on cost. Ten per cent margin on a $10,000 job is $1,000 of profit; a 10% mark-up on $10,000 of cost is $909. The rate you charge today is optional and changes none of the arithmetic — leave it blank and the answer is the same; fill it in and the result also says what that rate is earning, and what would have to be true for it to work.

bill this per crew hour

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The form opens on a worked example for a three-person crew. Change what is different about your shop and press the button.

Common questions

Why does it say my payroll burden is 92% when everyone quotes 20–30%?

Because the usual figure answers a different question. “Taxes plus insurance as a percentage of wages” is the textbook definition, and on the worked example that really is about 20%. But you pay wages on every paid hour and you invoice only some of them — 15 paid days off, and a fifth of the hours you do work going to drive time, estimating, shop time and warranty callbacks. The example pays 2,080 hours and bills 1,568. Burden here is the percentage that recovers the whole annual cost of employing someone across only the hours that get sold, which is what every bid calculator on this site multiplies by job hours. Use 20% there and the unbilled hours are never recovered on any job.

Isn’t overhead a percentage of revenue?

On a profit-and-loss statement, yes. Here it is deliberately a percentage of direct cost, because that is what the bid calculators do with it: they take a job’s labor plus materials and add the overhead rate on top. The denominator is annual direct cost — loaded field labor plus materials and subcontractors — so the number transfers cleanly. Mixing the two up is a quiet, consistent under-recovery on every job you price, because overhead-over-revenue is always the smaller number.

What is the difference between the bill rate and the break-even rate?

The break-even rate is what an hour costs you once burden and overhead are both covered — $65.18 on the worked example. Bill at exactly that and you finish the year with zero profit, having worked all of it. The bill rate adds your target net margin on top: at 12% that is $74.07. The gap between the two is the entire profit of the business, which is why a “small” discount off the bill rate is a large fraction of the margin rather than a large fraction of the price.

Why does the non-billable percentage move the rate so much?

Because it shrinks the denominator that everything else is divided by. It is the single most sensitive input on this page: the annual cost of employing someone does not change when utilization drops, so every unbilled hour has to be recovered by the hours that remain. The worked example bills 75% of its paid hours. If your crew is at 60% because of drive time or a long quoting cycle, the same wage and the same overheads need a materially higher rate to come out level. Be honest with this number rather than optimistic — it is the one most shops guess high on.

What do I do with the burden and overhead numbers once I have them?

Carry them. Every trade bid calculator on this site asks for crew wage, payroll burden %, overhead on direct cost %, and target margin, and those four are exactly what this page computes. Saving them here fills them in on the other tools so you type them once and price every job from the same business figures, instead of reaching for “about 20%” from memory on each one. If a computed rate is too large for the receiving forms to accept, the result says so rather than silently carrying a number that would be dropped.

Do I count the owner’s pay as overhead or as crew?

If the owner is working in the field on the jobs being priced, that time belongs in the crew wage and the crew count. If the owner is estimating, selling, and running the office, that pay is overhead — and leaving it out entirely, which is the common habit in an owner-operated shop, makes the overhead rate too low and the bill rate too low with it. Someone has to pay for the hours spent quoting the jobs you did not win, and this is the line where that happens.

Is my data uploaded anywhere?

No account and no network requests — the calculator runs entirely in your browser. Your rates are saved in this browser’s local storage so the other tools on this site can use them and so they are still here next visit. The optional usage counter records only which features were used and the day, never your wages, overheads, or the rate it works out.

Is this an accounting or tax opinion?

No. It is your own numbers, divided. It makes no determination about tax treatment, workers’ comp classification, or whether anyone is an employee or a contractor, and it does not tell you what to charge — the market and your own judgement do that. Check the figures against your payroll records, your insurance declarations, and a qualified professional before you price work with them.