Hourly rate calculator · Free tool
What hourly rate should you charge as a handyman or contractor?
A free calculator from makeasite.co, where we build websites for local trade pros. Start with the take-home pay you want, add your real costs, and divide by the hours you can actually bill. Then see what markup to use on materials.
Your hourly rate
$80 to $100
per billable hour, before materials. The higher number is what you'd need if you only bill 80% of the hours you planned.
- Break-even rate (no profit)
- $70
- Revenue needed per year
- $111,000
- Per working week
- $2,300
- Billable hours per year
- 1,440
- Yearly business costs
- $19,900
Rounded up to the next $5. Charging a little more beats finding out in March that you charged too little.
Charge the customer
$267
That's a 33% markup on your cost.
How this works
The calculator works backward from what you want to keep, the same way a bookkeeper would:
A handyman wants to take home $60,000, sets aside 25% for tax and has $19,900 a year in costs. $60,000 ÷ 0.75 = $80,000 before tax. Add costs: $99,900. With a 10% margin: $99,900 ÷ 0.9 = $111,000. At 30 billable hours for 48 weeks (1,440 hours), that's $77.08 an hour, or $80 rounded up. If only 1,152 hours get billed, it's $96.35, so $100.
The assumptions, said out loud
- The starting numbers are an example, not an average. We didn't pull them from a survey. Put in your own.
- Materials are separate. The rate covers your labor and running the business. Bill materials on top, with the markup from the second calculator.
- Taxes are a flat set-aside. Real taxes depend on deductions, your state and your filing status. The 15.3% self-employment rate is from the IRS; the rest is up to you and your accountant.
- Margin is on price, not cost. A 10% margin means 10% of what the customer pays stays in the business.
- No helpers. If you pay a helper, add their wages and payroll costs to "Everything else", or price their hours separately.
What's the difference between markup and margin?
Markup is a percentage of your cost. Margin is a percentage of the price. They're never the same number, and quoting with the wrong one quietly eats your profit.
| Margin you keep | Markup to add | $100 cost becomes |
|---|---|---|
| 10% | 11% | $111 |
| 20% | 25% | $125 |
| 25% | 33% | $133 |
| 33% | 50% | $150 |
| 50% | 100% | $200 |
"I mark up 20%" and "I make 20%" are different things. A 20% markup leaves you a 16.7% margin, so you keep $16.67 of every $100 the customer pays, not $20.
Post a few price ranges on your website, like "Most faucet swaps: $150 to $250." It filters out tire-kickers before they call and gets people used to your prices. It also gives Google something specific to show.
Sources
- IRS, "Self-employment tax (Social Security and Medicare taxes)": irs.gov
Questions people ask
What hourly rate should a handyman charge?
Enough to cover your take-home pay, taxes, overhead and some profit, divided by the hours you can actually bill. That number differs a lot by area and by how many hours you really bill, so work it out from your own costs with this calculator rather than copying someone else's rate.
What's the difference between markup and margin?
Markup is what you add on top of your cost, as a percentage of the cost. Margin is the share of the final price you keep, as a percentage of the price. A $100 cost sold for $125 is a 25% markup but only a 20% margin. Mixing them up is one of the most common ways to underprice a job.
How many billable hours does a contractor really have in a week?
Fewer than the hours you work. Driving, quoting, buying materials, callbacks and paperwork all take time you usually can't bill. Track a normal two weeks and count only the hours you could put on an invoice. The calculator also shows your rate if you bill 20% fewer hours than planned.
How much should I set aside for taxes when I'm self-employed?
Self-employment tax alone is 15.3% (12.4% Social Security plus 2.9% Medicare), according to the IRS, and income tax comes on top. The right total depends on your situation, so ask your accountant for your number and put it in the tax field.
Should I charge by the hour or by the job?
Many pros quote by the job and use an hourly rate to build the quote: estimated hours times your rate, plus materials with your markup. Customers get one clear price, and you still get paid for your time. Either way, you need to know your real hourly number first.