Labor Rate Calculator
The rate that matters is built from your numbers, not your competitor's website. Three inputs, honest hours, done.
The short answer
A solo tradesperson who wants $70,000 in pay, carries $30,000 of overhead and bills 1,200 hours a year breaks even at about $83 an hour and should bill around $96 with a 15 percent profit margin on top. That is the whole method: pay plus overhead, divided by hours you actually bill, plus profit. Billable hours is the figure most people get wrong. A full-time year is about 2,000 hours on paper, but driving, quoting, supply runs and invoicing are unpaid, so solo operators typically bill 1,000 to 1,400. Overhead for a one-person trade business (vehicle, insurance, tools, phone, software, marketing) commonly runs $20,000 to $50,000 a year. Check the answer against your market. In 2026, licensed trades such as plumbing, electrical and HVAC bill about $85–$150 an hour, while handyman, painting, cleaning and landscaping work sits nearer $40–$100. A break-even above your market means trimming overhead or finding more billable hours before raising prices.
Why billable hours is the number that lies
Everyone divides by 2,000 hours; nobody bills 2,000 hours. Driving between jobs, quoting, picking up materials, invoicing, and chasing payment are all real work that no customer pays for by the hour. A full-time solo tradesperson or freelancer typically bills 1,000–1,400 hours a year. Using the honest number is the single biggest correction most people need to make; it usually moves the answer up 40–60%.
Sanity-check the output
Compare your result against what your trade actually bills in 2026 in the Trade Pricing Report. If your break-even lands above your market's band, the fix is overhead or billable hours, not wishful pricing. If it lands far below, you have room you are probably not using.
The formula, step by step
- Break-even rate = (target annual pay + annual overhead) / billable hours per year.
- Rate to charge = break-even rate x (1 + profit margin % / 100).
- Day rate = rate to charge x 8 hours.
Billable hours are at least 1. Billable hours are the hours you can invoice, not the hours you work.
Worked example with the starting numbers
Target annual pay ($): 80,000; Annual overhead ($): 35,000; Billable hours per year: 1,200; Profit margin on top (%): 20. Result: break-even rate $96/hr, rate to charge $115/hr, day rate (8 hours) $920.
Typical 2026 US hourly labor rates by trade
| Trade | Standard hourly rate | Premium or specialty rate |
|---|---|---|
| Plumbing | $85–$150 | $150–$300 (after-hours, emergency) |
| Electrical | $85–$130 | $130–$200 (master, specialty) |
| HVAC | $85–$150 | $110–$190 (commercial) |
| Auto repair (per book hour) | $80–$150 | $130–$220 (dealership) |
| Handyman | $50–$100 | No separate tier |
| Painting (per painter) | $40–$75 | No separate tier |
| Cleaning (solo equivalent) | $40–$75 | No separate tier |
| Landscaping (per person) | $45–$75 | No separate tier |
| Freelance development or design | $75–$150 | $150–$300 (senior specialist) |
| Freelance writing or editing | $40–$120 | No separate tier |
Typical ranges as of September 2026 · US national. Editorial reference figures for typical US trade labor rates, checked against Numulo's 2026 trade pricing report where it covers them. Sources: Numulo 2026 trade pricing report.
Put the number on an estimate
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Frequently asked questions
How many billable hours should I plan on in a year?
Plan on 1,000 to 1,400 if you work alone and full time. The rest of a 2,000-hour year goes to driving, estimates that never close, supply runs, paperwork and callbacks. Track a month of your own time honestly before you settle on a figure. A business with someone else handling the office can bill more hours per tradesperson.
What should I charge for after-hours or emergency work?
1.5 to 2 times your standard rate is the usual convention for nights, weekends, holidays and emergency calls, with storm and disaster work at the top of that range. Put the premium and the hours it applies to on your rate sheet and your estimate, so the customer agrees to it before you roll out rather than after.
Should I charge a day rate instead of hourly?
A day rate suits work that fills a full day anyway, such as a painting day or a site day on a remodel, and saves both sides from counting hours. Set it at eight times your hourly rate or slightly under, and state what a day covers: start time, hours on site, and whether travel and material pickups are included.
How do I work out my real overhead?
Add up twelve months of actual receipts rather than estimating from memory: vehicle payments and fuel, insurance, tool purchases and repairs, phone, software, licensing, marketing and accounting. The lines people forget, such as replacing worn tools and license renewals, are usually what pushes the true figure up. Divide the total by your billable hours to see what overhead adds to every hour.
How often should I raise my labor rate?
Review it once a year against your actual costs, and raise it when fuel, insurance or wages have gone up. An increase of 5 to 8 percent announced in writing a month ahead keeps pace without surprising repeat customers. New customers can be quoted the new rate right away, which is also a quick test of whether the market accepts it.
Related
- Markup Calculator: markup, margin, and price from cost
- 2026 Trade Pricing Report
- All free invoice templates